Costing Policy & Analysis

Research Administration Office

University of California

LETTER
Information

December 18, 1995

CONTRACT AND GRANT OFFICERS

Subject: FDP Annual Meeting and Steering Committee Meetings

The Federal Demonstration Project annual meeting was held on December 7, 1995, at the National Academy of Sciences in Washington, DC. The next day, December 8, the FDP Steering Committee also met.

The purpose of this Information Letter is to alert you to the availability of meeting notes, handouts, and other materials on the Worldwide Web, which you can access via the RAO home page. The direct address for this Information Letter and the meeting materials is: http://www.ucop.edu/raohome/cgmemos/let95-23.html.

You will also find the minutes for the September 1995 FDP Steering Committee meeting at the same site.

We are not attaching these materials to this Letter in order to save on reproduction costs and paper usage.

Refer: Bill Sellers, 510-987-9847, william.sellers@ucop.edu

Subject Index: 02, 19
Organization Index: F-05, U-115

David F. Mears
Director
Research Administration Office


Notes on FDP Meeting, 12/7-8/95

Submitted by:
William Sellers
Research Administration Office
University of California

Notes on FDP Meeting, 12/7-8/95

Table of Contents

Notes on Annual Meeting

Notes on Terms and Conditions Task Group Meeting

Notes on Steering Committee Meeting

Agenda for Annual Meeting

Agenda for Steering Committee Meeting

1996 Meeting Dates

Outline for Task Force on Electronic Research Administration

Outline for Task Force on Effort Reporting

Outline for Task Force on Membership and Organizational Structure

Excerpt from Report of Committee on Criteria for Federal Support of Research and Development

Panel Discussion on Electronic Financial Reporting

Handout on Stewardship, Good Practices, and the Effects of Downsizing


Notes on FDP Annual Meeting, 12/7/95

Former Governor Celeste spoke of the importance of the "direct charging of facilities" study in preventing bad policy decisions from being made. He said his presentation of the study to OMB went very well and seemed to open everyone's eyes. With respect to FDP membership, he very much favored expanding it to include State government entities and federal labs. One future challenge that the FDP will face, he predicted, is the need to make differences between agencies disappear in order to foster cross-disciplinary (implies cross-agency) research.

At the session on ERA, representatives from several universities talked about their experiences in trying to move in that direction. The road appears to be filled with potholes.

During the session on PI perspectives, Samuel Silverstein/Columbia cited waste disposal requirements as being overly burdensome and in need of reform. He also mentioned problems with animal care costs (see below), OSHA regulations (particularly with respect to asbestos), international trade restrictions, and accounting for medical compensation plan income. With respect to the latter, he saw the problem arising from the fact that universities do not want to include such income in their direct cost base because this will lower indirect cost rates, but then it becomes very difficult to ask Congress to make up for reductions (because of the advent of managed care) in money that is not accounted for.

Janet Greger/Wisconsin estimated the amount of time spent by faculty serving on review committees (humans, animals, safety) and reviewing protocols in the tens of thousands of hours per year per institution. And the backlog keeps growing. She thinks that a "triage" approach to reviewing proposals, even taking into account those that are re-submitted, would eliminate at least 20% of this review time.

Micheal Kemp/Texas A&M reiterated that it is very important for the agencies to present a uniform front to the prospective PI with respect to proposal format.


Notes on FDP Terms and Conditions Task Group Meeting, 12/7/95

The task group discussed a proposal to add an "Amendment" clause to the general FDP terms that would formalize procedures for making changes to the FDP terms and agency-specifics. The discussion revealed that the agencies are willing to provide notification in advance of changes in agency-specifics (with the reason for the change), but not willing to have proposed changes subject to Steering Committee approval. Bill Sellers will re-draft the proposal and solicit further comments.

Also discussed were ways to move toward simplifying the agency-specifics. It was agreed that the university members of the task group would select those conditions that were causing real problems and send them Bill Sellers, who would in turn consolidate the list and then ask each agency for the history of how the language was developed, what the reasons were, and perhaps how the general terms might be changed that would allow the agency to delete its own special requirement.

Finally the group discussed a proposal to re-format the terms and conditions to be more in accordance with the structure of the revised A-110 and NSF terms (i.e., with sections devoted to post-award and after-the-grant requirements). We might then find that there are existing requirements that are actually pre-award requirements that have no place in the FDP award terms. We will need a volunteer(s) to do this!


Notes on FDP Steering Committee Meeting, 12/8/95

Discussion of FDP Structure

The task group on FDP structure (essentially Bob Hardy/NSF and Barbara Siegel/Northwestern) presented a draft (enclosed) that was reviewed and discussed in detail. It was decided by a unanimous vote that the "universe" of eligible FDP participants should encompass all research performers (other than State or local governments) that are eligible to receive federal grants/cooperative agreements. This includes both non-profits and for-profits. Direct participation of campuses that are part of systems, and DOE Laboratories, will be encouraged.

The task group, which was made a permanent standing committee, was charged with coming up with an RFP that would appear in the Federal Register February 1, 1996. Further finalization of the restructuring plan was deferred until we see how many and what kinds of organizations respond to the RFP.

Institutions (and their constituent parts) that are already in the FDP would automatically be part of the restructured FDP (if they wanted to continue) but would need to sign a new Memorandum of Understanding along with any other new members. The details would be spelled out in the RFP.

General FDP Terms

Ann Stuart/ONR distributed the final draft of the revised general terms. Most of the changes bring the document up to date with respect to current A-110 references. Unless there are any further comments from agency representatives by January 15, the document will be finalized as of February 1, 1996, and placed on the NSF Gopher.

Agency-Specific Terms and Conditions

Federal agency representatives were asked to discuss their current agency-specific requirements, highlighting any recent changes and giving advance warning of any changes in the near future.

ONR: they have tried several times to have the foreign travel prior approval requirement deleted, but without success. What is driving the requirement for prior approval of no-cost extensions is a problem they (and, it turns out, other agencies) are having with the rate of spending on grants. Folks at the agencies and in Congress who do not understand research, and who don't appreciate the perceived need on the part of PIs to husband resources in times of scarcity, want spending levels to reflect progress on the grant.

NSF: auditors are finding that grantees are not always obtaining prior approval for transfers involving participant support. NSF will soon be adding language dealing with conflict of interest and American-made equipment (the latter would be a "best-efforts" type of clause), and deleting language on procurement that now duplicates the revised general FDP terms. All FDP schools will be notified of the change in advance.

DOE: the prior approval requirement for sole-source procurements greater than $25,000 is still in existence but would be looked at. They are also reviewing their practice of having grantees counter-sign award notices.

AFOSR: the clarification on no-cost extensions will be deleted as soon as the revised general FDP terms are finalized.

Army: Army and what used to be the R&D Medical Command now have a common set of agency-specifics. Would like feedback from FDP schools on which prior approval requirements are causing problems.

NASA: in response to comments that some NASA field stations are not following FDP terms for FDP schools, Richard Kall said he would like to hear about specific instances as they arise.

Future FDP Initiatives

Geoff Grant/NIH led the discussion to try to find out the interest of the members in working on some of the problems that had been discussed the previous day. The final results were that the following task groups were established:

Electronic Research Administration: to work on proposal submission (EDI) plus electronic implementations of institutional profiles (need coordination with the Reps and Certs task group for this sub-task); PI profiles/biosketches; and progress reports. Work on bringing ERA to bear on financial reporting will be deferred.

Business Practices Clearinghouse: to work on facilitating exchanges of information/models regarding "re-engineering" the way we do research administration.

Effort Reporting: initiated by Peter Tenbeau/SUNY.

Just-In-Time Submissions: to work on expanding what NIH is doing at certain Institutes for animal and human subjects reviews (need link with COGR and the seven schools now doing a pilot in this area).

These four task groups would be in addition to these already-existing ones: Terms and Conditions, Reps and Certs, and FDP Organization.

There was some interest in tackling the problem of onerous hazardous waste requirements but for now it was decided to wait see what will happen when GAO finishes collecting information on the costs of compliance in this area (which they are doing in the Chicago area).

There was very little interest in working on the problem of animal care costs (i.e. the wide variations in costs because of the way some schools are still able to charge certain costs indirectly and others have been forced to direct-charge most of these costs).


Agenda

FEDERAL DEMONSTRATION PROJECT
ANNUAL MEETING OF THE COMMITTEE OF THE WHOLE

Thursday December 7, 1995

National Academy of Sciences
2101 Constitution Ave. N.W.
Washington, D.C.

Lecture Room

8:30 Continental Breakfast

9:00 I. Keynote Speaker: Richard F. Celeste, Chairman, Government-University-Industry Research Roundtable, Former Governor of Ohio

9:30 II. Campus Re-engineering and Electronic Research Administration (ERA) Initiatives-"Managing better, faster, cheaper!"

University use of computer technologies in developing effective and efficient systems for the administration of government-sponsored university research.

Moderator: William Kirby, National Science Foundation

Panel:
Robert Killoren, Penn State University
James Ball, Ohio State University
Pamela Webb, University of California, Los Angeles
Julie Norris, Massachusetts Institute of Technology
Regina Smith, Ph.D., University of Florida
Jack Kamerer, University of Illinois

11:00 Break

11:15 III. Perspectives of Principal Investigators - "If I were King or Queen of Research Administration..."-- PI suggestions for streamlining federally-funded sponsored research.

Moderator: Albert Barber, Ph.D., Vice Chancellor Emeritus, UCLA

Panel:
Samuel Silverstein, M.D., Columbia University
Janet Greger, Ph.D., University of Wisconsin,
David Kingsbury, Ph.D., Johns Hopkins University
W. Micheal Kemp, Texas A&M University

12:30 Lunch, Refectory (Lower Level)

1:30 IV. Future FDP/ERA Initiatives - "Finally the Twain Meet - FDP and ERA!"-- Identifying opportunities for improving research administration, through the use of electronic communications.

Moderator: Geoffrey Grant, National Institutes of Health

A. Investigator Benefits

B. Administrative Benefits 3:45 Adjourn
Agenda

FEDERAL DEMONSTRATION PROJECT
STEERING COMMITTEE MEETING

Friday December 8, 1995

8:30 Continental Breakfast

9:00 Welcome and Opening Remarks (Freise, Paoletti, Rosenberg)

9:30 Membership and Organizational Structure (Hardy and Seigel)

11:00 Break

11:15 Agency-Specific Requirements (Sellers and Stuart)

12:30 Lunch

1:30 Future Demonstration Projects (Grant)

· Proposed Initiatives Resulting from the Committee of the Whole Annual Meeting

3:00 Adjourn


1996 Meeting Dates

The meeting dates for 1996 are listed below. All meetings will be held at the Facilities of the National Academy of Sciences unless otherwise notified.

GR in front of a room number indicates that the meeting will be held in the Green building of the Academy's Georgetown facility, located at 2001 Wisconsin Ave. N.W. NAS indicates that the meeting will be held in the Academy's main building located at 2101 Constitution Ave. N.W.

Initial meeting information (hotel and location) will be mailed approximately six weeks in advance of each meeting. An agenda and pertinent background material will be mailed 2 weeks prior to each meeting.

Friday March 22: GR130
Friday June 21: NAS Lecture Room
Friday September 20: GR104
Thursday December 5: Annual Meeting: NAS Lecture Room
Friday December 6: NAS Lecture Room


A Proposed Task Force

For the Federal Demonstration Project Electronic Research Administration

December 5, 1995

At the December 10, 1993, meeting of the Federal Demonstration Project, a report, The Federal Grant Application - Evaluation Process: A Time for Review and Revision by David F. Mears summarized the relationship between Federal granting agencies and the research universities. This 1993 report noted that:

"The financial retrenchment in all sectors has compelled interest in survival strategies such as total quality management, business process reengineering, and reinventing government. The thrust of these strategies is to shift values from a priority on process to accomplishing essential functions more intelligently with fewer resources and streamlined processes."

The Mears Report called for adding "time, cost, level of effort, and minimizing delay" to the existing values of compliance with regulation and fair and impartial treatment. Among the eleven recommendations of the Report were three that are particularly relevant to the current discussion of electronic interactions between Federal funding agencies and the research universities:

The Report noted that NSF, NIH, DOE, and DOD were actively developing electronic proposal submission at that time and voiced the concerns that universities expressed about meeting many different agency requirements for hardware and software.

In the two years since the 1993 Annual Meeting where these issues were discussed, much has been accomplished in advancing electronic interactions between the universities and Federal agencies. Federal agencies have taken the lead on a number of proposal submission pilots. Electronic administrative functions, e.g., NSF e-mail awards and NSF FastLane Cash Requests, have been made operational at a number of institutions. The FDP Task Force on EDI Standards has completed its work and forwarded recommendations to the FDP and the Federal agencies. Universities have examined their own internal processes for ensuring compliance with Federal regulations and initiated reengineering processes of research administration at the campus level. As different applications have developed, it has become more evident that there are a myriad of approaches to electronic research administration that will solve agency and institutional problems and that will provide common faces for interactions between agencies and universities. It will most likely be necessary to develop several solutions to meet the varied needs of different universities be they large or small, public or private, and different agencies dealing with different research disciplines.

While most of the current electronic research administration efforts derive from the need to conserve the financial resources of the entity undertaking the effort, it is important to view the agency-university-researcher relationship as a system. It is equally important to consider the non-financial resources being invested in the research enterprise. It is also time to bring the many projects into focus so that the results of each can inform the others.

Since its inception the FDP has provided a forum and mechanism for the evaluation of factors that influence the agency-university-researcher partnership. It has advocated building systems that allow for a maximum amount of research to be accomplished with available resources while ensuring compliance with applicable regulations and an auditable stewardship of public funds. In keeping with that mission it is appropriate that the FDP undertake a comprehensive review of electronic research administration.

It is proposed that the FDP through a new or existing Task Force on Electronic Research Administration, identify approaches to electronic research administration that are effective and can be generalized for common applications. The goals of the Task Force would be to evaluate electronic research administration projects to determine if they significantly:

It is proposed that the Task Force approach these goals through a series of activities. As a first stop, the Task Force would be called upon to host, on behalf of FDP, a workshop in which all interested universities, professional organizations, federal agencies could analyze and synthesize the information available from the experience to date with electronic research administration. The goals of the workshop would be to:


The Research Foundation of State University of New York

PROPOSAL TO REVISE A-21 EFFORT REPORTING REQUIREMENTS

The effort reporting requirements of OMB Circular A-21 (section J8) should be eliminated or substantially changed to relieve colleges and universities (institutions) of an unnecessary and costly administrative burden. Overall, the effort reporting requirements in A-21:

· do not produce the desired effect to ensure accountability and therefore the costs of compliance far exceed any marginal benefits obtained.

· require additional processes which are duplicative of practices already in place at institutions to reimburse employees. · require processes to obtain information (e.g. cost sharing) that could be obtained much more efficiently through other methods.

Circular A-21 should require the institutions to establish reasonable administrative processes to ensure that personal effort paid for by the federal government is actually provided. As a general rule, those processes established by the institution to ensure that the effort of its employees is commensurate with payment for such services should be adequate.

SUGGESTIONS FOR ACTION

Establish a working group which includes at least one representative from OMB to investigate alternative approaches that would be less burdensome. The Research Foundation of SUNY would be willing to lead this effort as an FDP initiative.

Test the alternatives and develop recommendations to provide for a more flexible and less costly administrative requirement. One alternative may be for the principal investigator or an individual with first hand knowledge to certify at the end of a project to the reimbursed personal effort.

Unless a particular grant or contract specifically requires cost sharing as a condition of the award, discontinue the requirement to certify institutional cost sharing effort (not including actual dollar matches) for the following reasons:


DRAFT

December 7, 1995

Membership and Organizational Structure Task Force

Final Draft Report

The Task Force was charged with three tasks. Below is our response with regard to each of those tasks.

I. Study the institutions, organizations, and agencies (groups) that should be recommended as eligible, whether as a full member or in some associated way, for participation in the FDP.

The original 1988 RFP for the FDP specified that "The selection of organizations is intended to be broadly representative of the research community, including primarily large and small public and private colleges and universities, and also possibly predominantly undergraduate institutions, non-profit research institutions, hospitals and profit-making organizations."

The Task Force believes the original concept of broad representation from the research performing community remains viable. In fact, we view broad representation as essential for the FDP to serve as the focus for demonstration and pilot testing of reengineered processes and administrative requirements for Federal support of research. The Task Force recommends that eligibility be open to all classes of performing organizations, and that strong efforts be made to encourage participation of institutions and organizations in addition to the large academic research institutions that comprise the present active non-Federal FDP membership.

There are a number of collateral issues that arise in this context. One is membership eligibility of professional associations, scientific societies, and other such groups. The Task Force believes establishment of an associate or affiliate membership status should be considered for such groups. That status might also be offered to smaller institutions or organizations that are recruited to participate in demonstrations or pilots sponsored by FDP member agencies (but have not otherwise applied for full FDP membership). Another issue has to do with participation of state and local government entities in the FDP. The Task Force notes that a state government dimension was clearly contemplated in the original RFP. There also is much discussion currently of establishment of "partnering" arrangements between Federal agencies, research performers, and state and local government entities. All of this suggests a need to address the issue of state and local government participation in the FDP. However, we recognize the complexities of this issue, and recommend that it be deferred for later consideration.

The issue of membership eligibility for university consortia was extensively discussed by the Task Force. The group believes that FDP goals and objectives are best achieved by direct participation of member institutions, and that membership should not be extended to consortia of research performing organizations. However, a generic exception should be made for non-profit foundations that serve as legal agents for otherwise eligible institutions (e.g. university research foundations). A similar exception should be made for central system offices of statewide university systems (although the Task Force encourages the participation of individual campuses in FDP).

With regard to Federal agency membership, the Task Force believes that any agency should be admitted to FDP membership on request under the same conditions that apply to other participating agencies (see #II). We also recommend that efforts be made to encourage the participation of other Federal agencies that provide significant grant support for non-research purposes to FDP institutions. The most notable example is support for educational activities provided by the Department of Education. The Task Force notes that other FDP member agencies, e.g. NSF, also provide significant support for educational activities. This suggests the focus of the FDP should be broadened to include Federal agencies that provide support for research and education, especially where research is closely associated with education as at colleges and universities. Other agencies and organizations involved in similar activities, e.g. science museums, also should be eligible for membership.

Finally, the Task Force was asked to consider ways to encourage the participation of individual investigators in the FDP. The Task Force strongly agrees that such participation is desirable. However, the Task Force does not believe that membership should be open to persons in an individual capacity. We recommend that each participating FDP institution name at least one investigator to participate in the FDP on an equal basis with other institutional representatives (typically administrators at present). Similarly, the Task Force recommends that each Federal agency nominate at least one program manager as an FDP representative. In this way the critical perspectives of such individuals can be brought to bear on FDP activities, while preserving the organization-based membership concept.

II. Develop criteria and procedures for such groups to become members, or otherwise participate in, the FDP and recommend minimum obligations for such participants.

The Task Force recommends initiation of a new phase of FDP. This would involve issuance in the Federal Register of a new solicitation for FDP membership along the lines of the 1988 RFP, preparation and submission of proposals from non-Federal participants describing their existing and planned efforts aimed at reengineering and streamlining processes and systems for administration of Federal support, describing possible demonstration projects and stating their commitment to FDP objectives and agreement to participate in FDP activities. All such proposals should be signed by a senior official authorized to commit the institution in such matters (in the case of educational institutions Provost level or higher).

The Task Force recommends the following criteria for non-Federal FDP membership:

1. Establishment and maintenance of management and administrative procedures and systems that comply with the standards and requirements of the Federal government for administering Federal awards for research and education (including lack of material weaknesses in internal control structures as confirmed by applicable audit requirements and substantial compliance with Federal policies and regulations pertaining to grant administration, such as timely technical, invention and financial reporting).

2. Agreement to actively participate in the FDP, including regular attendance, at institutional expense, of FDP committee and task force meetings, and participation in new or ongoing FDP demonstrations and pilots. Failure to attend two or more consecutive regularly-scheduled FDP Committee meetings will be grounds for termination of membership.

3. Commitment to continued efforts to reengineer and streamline processes and systems for administration of Federal Support and to provide a report to the Steering Committee at least every two years on those efforts.

4. Execution of a memorandum of agreement confirming the above, and setting forth certain additional understandings and requirements (draft not yet completed).

Existing FDP member institutions (excluding consortia except as may be covered under the generic exception in Part I above) that qualify for interim Steering Committee membership (see Part III) will be admitted into the next phase of FDP upon execution of the memorandum of agreement by an appropriate senior official.

For Federal agency membership, the Task Force recommends:

1. Agreement that agency awards to FDP member institutions and organizations (excluding associate or affiliate members) will be governed by FDP Terms and Conditions (unless otherwise provided by statute or regulation), and agreement to use the FDP as the primary focus for tests and demonstrations of reengineered processes and systems for the support of research and education (with examples, if possible), provided the FDP is sufficiently representative of the target organizations and groups.

2, 3, and 4. as stated above.

Federal agency membership should be based on a letter from a senior official (Assistant Secretary level or higher) committing to the above.

The Task Force recommends that any applicant organization that meets the membership criteria and has submitted a proposal including all of the required components be accepted for membership.

The Task Force also believes that membership eligibility should be periodically reviewed against the above membership criteria. FDP member institutions and organizations not meeting the four criteria at that time would be dropped from membership.

Before termination of membership, institutions/organizations will be given notice and an opportunity to respond.

III. Review the organization structure of the FDP in light of an expanded participation and make recommendations as to a workable governing and organization structure.

The Task Force recommends the following organizational structure for the next phase of the FDP:

The primary forum within the FDP for interaction among all the participants will continue to be the Committee of the Whole. Each non-Federal member institution or organization will designate a minimum of two representatives (one administrator and one investigator) to the Committee of the Whole. Similarly, each Federal agency participating in the FDP will designate two representatives (policy/administrative/business and program manager). Additional institutional/agency representatives may attend and participate in meetings as observers, as may representatives from affiliate membership groups.

The Committee of the Whole will meet twice a year. A two-day meeting format is envisioned, with task force meetings the first day and reports to the Committee of the Whole the next. The Committee of the Whole will receive and approve recommendations for demonstrations, progress and evaluation reports on demonstrations and pilots, and approve the conveying of recommendations to the Office of Science and Technology Policy.

The Steering Committee will meet at least twice a year, in alternative calendar quarters from the Committee of the Whole. The Steering Committee will consist of an official representative from one-third of the non-Federal FDP member institutions and organizations. Membership will be rotated among the non-Federal members every two years. The Steering Committee also will include an official representative from each member Federal agency. The Committee of the Whole may delegate any of its responsibilities to the Steering Committee, which in addition will be responsible for tasking Task Forces and assigning their membership, developing position papers, reviewing and approving additional associate or affiliate membership requests and membership terminations, and undertaking other activities consistent with FDP purpose and objectives.

The Executive Committee will meet on an as needed basis, and will be empowered to take necessary actions on behalf of the Committee of the Whole and/or Steering Committee. It also will develop meeting agendas for these Committees, monitor Task Force progress, identify opportunities for new demonstrations, and act as liaison for the FDP with other groups and individuals. The Executive Committee will consist of two institutional Steering Committee representatives, two Federal agency representatives, a Government-University-Industry Research Roundtable representative, and a senior Federal science official. The Steering Committee will appoint members to the Executive Committee annually except for the senior Federal science official who will be selected from, and named by, the Research Roundtable Council and will have an indefinite term of service.

The Government-University-Industry Research Roundtable of the National Academy complex will continue to function as a neutral convenor for the FDP, and will provide the Executive Secretariat. It will continue to facilitate meetings and discussions of the Committee of the Whole and Steering Committee, and the contributions of the FDP to Federal policy-making. The Task Force notes with deep appreciation the strong support of FDP goals and objectives by the Roundtable leadership, and their efforts to increase the impact and significance of FDP activities.

The Office of Science and Technology Policy (OSTP) will be the focal point within the Federal government to receive, review and implement as appropriate recommendations emanating from FDP activities (as per 9/1/95 memorandum from Director, OSTP to NSTC Committee on Fundamental Science). OSTP and the Office of Management and Budget (OMB) will have standing invitations to send representatives to attend and participate in FDP Task Forces, Committee of the Whole and Steering Committee meetings. We also believe it would greatly enhance membership and participation in FDP for the Directors of these Offices to issue statements affirming support for FDP purpose and objectives coincident with the issuance of the solicitation for the next phase of FDP.

Task Forces will be established by the Steering Committee on an ad hoc basis, and tasked with developing specific demonstrations and pilots.

The Federal Agency Working Group will continue to be comprised of representatives of the Federal agency Steering Committee members. The Group will convene periodically to form a consensus about proposed demonstrations and pilots they are willing to test, as well as new or revised FDP terms and conditions.

In developing these recommendations, the Task Force recognizes certain transitional difficulties may arise in moving to the recommended new membership and organizational structure. We recommend that in the interim the current Executive and Steering Committees continue to function, in order to assure continued oversight of FDP activities and maintain a viable structure. In the case of the Steering Committee, interim membership should be limited to only representatives from those institutions and agencies that have maintained active participation in FDP, which we define as participating in at least two Steering Committee meetings during calendar years 1994 and 1995. Implementation of the next phase of FDP will be overseen by this group, which will terminate once the new membership and organization structure is in place. In addition, one-third of the non-Federal membership of the initial Steering Committee established for the next phase of FDP should consist of present FDP institutions.

Finally, the Task Force recommends this next phase of FDP "sunset" after six years, at which point the activity should be evaluated and a decision made as to another phase or successor activity, if any.

Proposed Timeline for Implementation
ActivityTarget Date
Federal Register Notice2/1/96
Proposals Due3/15/96
Notification of Acceptance5/1/96
Convening of new FDP Committee of Wholemid-June '96

Barbara Siegel
Co-Chair
Northwestern University

Robert Hardy
Co-Chair
National Science Foundation


Allocating Federal Funds for Science and Technology

Committee on Criteria for Federal Support of Research and Development

NATIONAL ACADEMY OF SCIENCES
NATIONAL ACADEMY OF ENGINEERING
INSTITUTE OF MEDICINE
NATIONAL RESEARCH COUNCIL
NATIONAL ACADEMY PRESS

Washington, D.C. 1995

IMPROVING THE ALLOCATION PROCESS

RECOMMENDATION 12. Research and development should be well managed and accountable but should not be micromanaged or hobbled by rules and regulations that have little social benefit.

Science and technology must be managed well, particularly when public funds are at stake. Fraud, misuse of funds, violations of human subject protections, or other abuses should not be tolerated. Maintaining safeguards requires credible mechanisms for investigation and enforcement. At the same time, federal agencies must strike a balance between the need for accountability and the burden of regulation. Public dissemination of the results of federally funded research and development is an important element in achieving maximum return on public investment, and it also contributes to defining for the public the value of that investment.

If there is no regulation. the risk of abuse will rise, but regulation imposes significant cost. In the past 2 decades, the trend has been toward increased paperwork to comply with procurement regulations, fair hiring practices, restrictions on drug use, and many other public concerns that are important but that impose constraints on the conduct of federally funded research and development.

Because procedures intended to enhance accountability have become increasingly burdensome, continued scrutiny of the purposes, effectiveness, costs. and alternatives to current practices would be welcome, beginning with a thorough overhaul of the regulations and followed by systematic, periodic reviews. The Office of Management and Budget and the Office of Science and Technology Policy should work together to target one or a few areas of regulation and accountability assessment each year and should encourage agency innovation to streamline or replace current practices.

The effect of regulations and social mandates can be quite severe for performers of federally funded research and development. If regulations are reviewed and either reduced, streamlined, or eliminated by the OMB-OSTP effort recommended, the committee believes that the productivity of the research and development system can be improved and costs can be reduced. For their part, universities and other performers should review their own procedures and regulations. The Federal Demonstration Project sponsored by the Academies' Government-University-Industry Research Roundtable demonstrates that improvements can be made without sacrificing important goals.


Panel Discussion

Administrative Benefits of ERA

Cash and Financial Management

Presented by William Sellers, University of California

I predict that the current model we generally use to describe electronic research administration, where information is transmitted between institutions and agencies, will be superseded in the near future by a different model, where addresses are the only things that are transmitted. By "addresses" I mean primarily URLs on the Worldwide Web, but the term is intended to have a more general meaning, similar to its meaning in a programming environment, where parameters are said to be passed by "reference" rather than by "value."

An annual expenditure report in its current hard-copy format is simply a summary of information already residing in an institution's accounting system. An electronic version of this report is still a bunch of data that essentially duplicates data already generated by the grantee for its own purposes. Instead of sending data, it will prove to be much simpler and more efficient to simply send the granting agency the address, i.e. the location, of the data that are already there.

This is putting it a little too simply. In order for the process to be workable, grantees will have to convert and maintain their accounting systems as SQL-type databases (or in some comparable format that will allow queries to be made of the database use the Common Gateway Interface, CGI). But I am reasonably certain that institutions will be making this conversion for their own internal purposes, primarily to provide institution-wide connectivity and access to centrally-managed information systems.

So let's assume that the grantee institution has made this conversion, and that its extramural funds accounts are maintained in SQL databases. The next step would be to set up a home page on a Web server, one line of which would be labeled something like "Expenditure data for selected awards from NIH" and another line might be "Expenditure data for selected awards from NSF" and so on. The selected option would be linked to a PERL script or, even better, a compiled program, that would process user (in this case, agency) requests, go and get the requested data, and display it on the user's screen. This sort of scenario, incidentally, is already used in reverse, where the "user" is a member of the public and the server is maintained by a federal agency (as in EDISON). Issues regarding mechanics and security have thus already been pretty much resolved and all that has to be done is to make the process go in the other direction.

With the scenario outlined above, grantee institutions would not make financial reports at all. I consider this to be one of the ultimate goals of ERA. My reasons for thinking that the achievement of this goal is inevitable are twofold, one practical and the other theoretical. The theoretical reason is that on the Internet the concept of "location" is not useful: all the vast amount of information that is accessible, or will be accessible, can be thought of as residing on every machine connected to the Internet. Thus the idea of moving information from place A to place B becomes the same as the idea of moving information from place A to place A, and this makes no sense.

The practical reason is that institutions can no longer afford to reformat already existing data and send it somewhere. Accounting managers will strenuously object to what they perceive as "uncontrolled" federal access to institutional data, when in fact what they mean is access to "unchecked" data, because the access will indeed be controlled by the CGI script. But the fact is that the data will not be checked anyway, given current "re-invention" and "downsizing" initiatives that institutions are being forced to undertake with fewer and fewer resources. [Distribute David Mears' handout]

Lest the federal agencies conclude that such initiatives are eroding the "stewardship" of federal funds, I refer you to section C of the handout, which lists all the controls that will continue to be in place even after downsizing.

Let me reiterate my prediction: the real result of ERA will be that grantee institutions no longer send financial reports to the funding agency; and agencies will still be able to get all the information they need to monitor the use of federal funds.


Stewardship, Good Practices, and the Effects of Downsizing

David Mears, University of California

  The Good Old Days (i.e. 5 years ago)        Today's Reality (post-downsizing)

A. Stewardship - Federal Expectation

100% standard of perfection (ALL costs     100% standard is not realistic or
allowable; ALL costs allocable), despite   affordable.  For risk management purposes
government acceptance of principle that    (recognizing some minimal degree of human
efficiency is of greater value  than       error), shift to a 98.5% expectation.
perfection in area of equipment            GAO found that 50% of federal agencies
(threshold moved from $500 to $5000) and   could not adequately account for federal
small purchases (threshold moved from      funds.
$25K to $100K).

Cost-reimbursement/procurement             Lump sum, assistance support.
conception

Focus on individual expenditures.          Shift to reliance on approved systems.

Each agency directly responsible for       Expand agency recognition and reliance
on numerous federal checks, controls,      external audits, etc., listed in C.
accuracy of grantee expenditures.          below.

B. Good Practices - Grantees

PI primarily responsible for               Accept as a valid principles.
allocability decisions (1993 A-21
revision).

Department administrator responsible       There is less administrative capacity
for checking "on-site" for allowability,   than before.  Shift to reliance on
and questioning if not.                    systems and controls listed in C. below.

Central campus extramural funds office     There is less capacity to check than
responsible for reviewing for              before.  Shift to reliance on systems and
allowability before submitting ROE, on     controls listed in C. below.
some basis short of 100%.

Whenever a new requirement imposed, or     More responsibilities have been
more attention needed, more                assigned to fewer people.  Limits of
administrators were added.                 institutional administrative capacity
                                           have been reached.

C. Assurances and External Reviews

Annual external A-133 audits: the audit program checks for unallowable costs by
sample, and reviews internal controls.

Institutional internal audits.

Institutional financial controls, for example:
 Employees cannot approve their own travel
 Equipment purchases require more than one signature
 Consulting agreements have separate reviews
 Accounting office checks on grant award restrictions
 Accounting structure designed to exclude unallowable costs
 Federally-conducted reviews of purchasing and property management systems
 Institutional fiduciary responsibility to trustees/regents/governors
 Financial and administrative systems reviewed and approved by the federal government
 "Money-back guarantee" -- A-133 audit findings do result in refunds
 Agency IG audits (NSF IG, DHHS IG, etc.)
 GAO audits
 Indirect cost proposal certification that no unallowable costs are included
 Cost accounting standards (CAS) and disclosure statements

D. Conclusions

Institutions stand responsible for managing federal funds, notwithstanding what
happens inside the institution -- cf. A-21, C.4.d.(1).

Now is the time to find the exception to Mears' Law of Government ("For every
action there is an unequal, inapposite overreaction").  The downsizing of
administration should not cause an undue federal concern, because there are
numerous federal and institutional controls to assure reasonable outcomes.

Minutes of the FDP Steering Committee Meeting

September 23, 1995

Chuck Paoletti and Earl Freise, members of the Executive Committee, opened the September meeting. In addition to FDP members and Roundtable Staff, representatives of the Office of Science and Technology Policy, Department of Transportation, Massachusetts Institute of Technology, University of Illinois-Urbana, Federation of American Societies for Experimental Biology, Association of American Medical Colleges, Council on Governmental Relations, and the Association of Independent Research Institutes attended the meeting.

I. Update on Regulatory Reform

George Vermont, OSTP, informed the members of the Steering Committee that Jack Gibbons sent a letter to the National Science and Technology Council's Committee on Fundamental Science requesting that they assume responsibility for reviewing evaluation results from the FDP, and implement any related recommendations into common practice. (See Attachment A.) Gibbons requested that the NSTC Committee develop a procedure for achieving this objective and that they provide him with an update on their actions by February 1, 1996. Vermont could not report any progress on having NPR or Vice President Gore issue recommendations that the FDP terms and conditions be adopted by all agencies for research awards to colleges and universities.

Jean Morrow expressed the FDP's appreciation for all of Vermont's work done on behalf of the FDP.

II. FDP Terms and Conditions Task Force

Ann Smart, co-chair, reviewed recent activity of the Federal Agency Working Group regarding FDP Terms and Conditions and provided the Steering Committee with a draft of the Group's proposed revisions to the Terms and Conditions. (See Attachment B [not scanned; see FDP terms on NSF Gopher, effective 2/1/95].) The Working Group placed before the Steering Committee three options for consideration in revising the FDP Terms and Conditions:

Option 1: Update the FDP Terms and Conditions to conform with the revised OMB Circular A-110 only.

Option 2: Instead of referencing or repeating OMB Circular A-110, call in all of OMB Circulars A-110 and A-21. Then, state the expanded authorities or unique provisions of the FDP.

Option 3: Eliminate FDP terms and conditions as OMB Circular A-110 has incorporated most of the significant changes. (See Attachment C [slides not scanned].)

The Task Force asked members to provide their comments on the revised FDP Terms and Conditions and on the three Options to Ann Stuart by October 13. Upon receiving these comments, the Task Force will send out a final copy of the FDP Terms and Conditions. The Committee will have until November 30th to comment on the final version.

At present, NSF and ONR have provided NSF with their most recent Agency-Specific Requirements. Agencies were encouraged to provide these requirements in ASCI format to Jean Feldman at the NSF. FDP Terms and Conditions and Agency-Specific Requirements are listed on the world wide web at http://www.nsf.gov/.

The Task Force plans to distribute the final FDP Terms and Conditions at the Annual Committee of the Whole Meeting in December. In addition, at the Annual Meeting Agency representatives will review their Agency-Specific Requirements and select FDP members will discuss key provisions, such as relatedness.

III. Direct Charging of Facilities Costs Task Force

David Mears, co-chair, provided the Steering Committee with a draft executive summary and report addressing OMB's request for FDP assistance in examining ways to subject a greater portion of research costs to the peer review process by directly charging facilities costs to specific research grants and contracts. (See Attachment D.) Upon reviewing the conclusion and recommendation, the Committee endorsed the report in concept. Mears asked the Committee to review the report and provide all comments to Anne-Marie Mazza by September 27. The Steering Committee expects to submit the report to OMB in October.

IV. Update on the Benchmark Study

Chuck Paoletti reviewed the benchmark study that the Interagency Working Group is conducting for OMB. The study considers benchmarking facilities costs for new and renovated facilities. The Working Group expects to provide OMB with its findings in October. The Working Group is comprised of six facilities engineers along with federal officials, grants management and business management personnel. Over the course of conducting its study, the Working Group met with AAU and COGR members.

On a related issues, Tony Mazzaschi of AAMC informed the Steering Committee that the House Appropriations Committee encouraged the sponsors of the Phoenix Plan to finalize their research and the Committee urged NIH and OMB to cooperate fully with the university community on this matter. The Senate appropriations bill refers to concepts associated with the Plan and encourages the university community to work with OSTP, OMB and the federal research agencies on this initiative. (See Attachment E.) According to Mazzaschi, the sponsors of the Phoenix Plan met with various foundations seeking financial support for the research phase of the project which they hope to complete by early Summer 1996. Over the summer, the sponsors of the Plan retained Mathematica to develop a research design for the Plan.

Jim Lewis voiced his opposition to the Phoenix Plan and offered to provide the Committee with an internal memorandum he wrote regarding the Plan. (See Attachment F.) A number of other FDP University Steering Committee members indicated that their institutions were not supportive of the Phoenix Plan concept.

V. Electronic Communications Task Force

Jean Morrow and James Ball, co-chairs, reviewed current activities of the Task Force. Morrow focused on the Business Practices Group's efforts to use electronic communications in the grant application process, and discussed the DOE's Electronic Data Initiative (EDI). (See Attachment G [slides not scanned].) Morrow indicated that DOE hopes to go paperless over the next five years. Ball provided the Steering Committee with a list of institutions participating in electronic research administrative activities such as Fastlane and EDI. (See Attachment H.) Ball discussed the role of the FDP in electronic research administration (ERAS), and suggested that the FDP take advantage of computer technologies currently available for sponsored project administration. (See Attachment I.) The Task Force recommends that the FDP consider the following:

A session (or a whole day) on electronic research administration at the December Annual Meeting of the Committee of the Whole;

Transmission of award notices electronically, using an EDI format;

The "strategic role" that electronic technologies and a re-engineering approach might play as the FDP develops future initiatives.

The Task Force will continue to develop a list of ERA initiatives and contacts and will create an electronic listserver for FDP members.

VI. Membership and Organizational Structure Task Force

Earl Freise reminded the FDP members that during the June meeting the Steering Committee agreed to offer membership to the Massachusetts Institute of Technology and the University of Illinois at Urbana-Champaign. A letter extending membership, along with the FDP agreement, are expected to be sent to MIT and Illinois shortly. [Since the September 22 meeting, the FDP Executive Committee decided to delay an offer of membership to MIT and Illinois until the Membership and Organizational Structure Task Force finish their work on FDP eligibility criteria and membership requirements.]

Bob Hardy and Barbara Siegel, co-chairs, reported that they had not received comments from members of the Steering Committee regarding the Task Force's draft recommendations for membership and committee structure. Hardy reviewed the charge of the task force:

Identify organizations that should be recommended for membership in the FDP;

Develop criteria and procedures for membership and recommend minimum requirements for participation; and

Review the structure of the FDP and make recommendations as to a workable governing and organizational structure.

Siegel raised two issues that the Task Force is struggling with: defining the mission of the FDP, and specifying the size of the FDP. Siegel suggested that it is difficult to determine the structure of the FDP if the mission is not clearly defined. Some individuals suggested that the FDP had met many of its original objectives. Others indicated that there was still much to be done and that it would be beneficial to consult with PIs regarding the areas that present the most problems to the conduct of their research.

Regarding the size of the FDP, questions were raised as to whether or not the FDP should be opened, whether the steering committee should be limited in size, and whether the FDP consisted of the appropriate mix of institutions. Freise polled the FDP members present on whether membership in the FDP should be opened or limited. The members appear to be evenly split over the issue of broadening membership.

The Steering Committee was asked to provide their comments regarding the draft recommendations to Siegel or Hardy. (A copy of these recommendations is enclosed as Attachment J.) The Task Force plans to ask for the Steering Committee's endorsement of the recommendations at the December meeting.

VII. Annual Meeting of the Committee of the Whole

Members of the Steering Committee were asked to propose themes for the December Annual Meeting. Most of the ideas focused on two major areas: 1) electronic communications/commerce and 2) defining the mission of the FDP. The Committee decided to focus the Annual Meeting on electronics communications/commerce. Freise and Paoletti appointed a planning committee comprised of Geoff Grant, Jean Morrow, James Lewis, and Peter Tenbeau. Grant and Tenbeau will serve as co-chairs.

VIII. Miscellaneous Business

Jo Ann Treat will serve as co-chair of the Representations and Certifications Task Force.

Richard Kall is the new NASA representative on the FDP Steering Committee.


ATTACHMENT A

THE WHITE HOUSE
September 1, 1995

MEMORANDUM TO CATHIE WOTEKI, NEAL LANE, AND HAROLD VARMUS
NSTC COMMITTEE ON FUNDAMENTAL SCIENCE

FROM: JACK GIBBONS, ASSISTANT TO THE PRESIDENT FOR SCIENCE AND TECHNOLOGY

SUBJECT: Federal Demonstration Project

I request that the Committee on Fundamental Science adopt as pan of its charge, responsibility for reviewing evaluation results from the Federal Demonstration Project (FDP) and for translating related recommendations into common practice. Please develop a mechanism for accomplishing this objective and provide me with an update on the committee's action by February I, 1996.

The FDP, a cooperative effort among more than fifty research institutions and nine Federal agencies, is designed to improve .the management of federally-funded research. The goal of the FDP is to enhance research productivity without compromising the stewardship of public funds, by eliminating unnecessary administrative procedures and by streamlining those necessary to ensure accountability.

Since its inception in 1988, the FDP has designed and tested a number of valuable modifications to Federal research management procedures. Outcomes of successful FDP demonstrations typically consist of recommended changes to Federal government-wide policies issued by the Office of Management and Budget (OMB).

Previously, a Federal Interagency Assessment Committee (IAC), composed of senior "'-agency officials and created at the suggestion of the OMB, reviewed the results of FDP demonstrations and issued appropriate recommendations to Federal policy making bodies. The IAC no longer exists, and in order to ensure the systematic and timely review of FDP findings and initiatives, we need to charge an authoritative group with responsibility for translating successful demonstrations into Federal research policy. The logical body to develop a mechanism for accomplishing this this objective is the National Science and Technology Council's Committee on Fundamental Science.

Thank you for your continued support as we work to ensure a more effective national program.

Jack Fellows
Angela Phillips Diaz


ATTACHMENT B

[Not scanned--see FDP terms on NSF Gopher after 2/1/95]


ATTACHMENT C

[Not scanned--already covered in minutes.]


ATTACHMENT D

DRAFT: NOT FOR CIRCULATION

EXECUTIVE SUMMARY

Direct Charging of Space

September 21, 1995

On February 1, 1995, Alice M. Rivlin, Director of the Office of Management and Budget (OMB), requested the assistance of the Federal Demonstration Project (FDP) in developing and testing ways to subject a greater portion of research costs to the peer review process by charging facilities costs directly to specific research grants and contracts. In further discussions with OMB officials, the FDP determined that the problem at hand was two-fold: Can one develop models to direct charge space? and, Should institutions and the government institute a system of direct charging the costs of space? The FDP agreed to assist OMB and to provide a report to OMB by October, 1995.

Direct Charging Space Models Facilities costs could be directly charged to projects in a variety of ways. Three models are discussed to illustrate the range of issues involved in direct charging facilities costs. These include:

The Minimalist Model: Separation of the Indirect Cost Components

The Minimalist model utilizes current A-21 methods of calculating, allocating, and pricing facilities costs. Under this model the facilities component is separated from the indirect cost rate. Both the facilities and administrative components are stated separately as indirect' costs in terms of percents and dollars. A variation of this model states facilities costs in terms of dollars, and lists these costs as a direct cost item.

Direct Charge Facilities Users: Average Square Foot Concept

This model continues the A-21 method of calculating facilities costs for all facilities elements. However, it shifts the base for allocation of facilities costs from Modified Total Direct Costs (MTDC) to Usable Square Feet of Research Facilities (R-USF). The same averaging concept is used to calculate the cost for R-USF as is for calculating MTDC. Facilities costs are calculated by multiplying a quantity of R-USF by the R-USF unit price, and can be presented in a budget proposal either as a distinct indirect cost component, or as a direct cost element.

Direct Charge Facilities Cost by Project

This model explores the possibility of differentiated research facilities costs in lieu of average costs per unit of facilities. The model allocates aggregate research facility costs to buildings and rooms, within buildings, to develop a "room cost." The "room cost" is then allocated to projects. By shifting the cost objective from projects to rooms, there is a fairly constant inventory of rooms to which costs can be allocated. Room costs are allocated to projects based on room use. The time basis may be on a monthly proportional basis, or fixed for a budget or project period. Under this model, costing concepts are not equal to the precision of A-21 direct costing concepts, but are, in general, a step toward approximating actual, differentiated costs that can be allocated to individual projects.

Criteria for Assessing Direct Charging Models Each model of direct charging of facilities costs could affect researchers, proposal reviewers, universities, and research sponsors. In evaluating the three models, the Task Force considered the following criteria:

Impact on the Principal Investigator - Does this model improve the ability of the Principal Investigator to use and pay for only those facilities he or she judges to be necessary to do research?

Impact on the Peer Review Process - Does this model allow peer reviewers to evaluate the extent of facilities use planned and the associated costs?

Impact on Academic Administration and Campus Collegiality - Does this model encourage administrators to invest in facilities that are of the highest priority?

Administrative Burden - Does this model impose prohibitive administrative costs and complications on research universities, university administrators, and faculty?

Impact on Federal Agencies - Does this model impose burdensome requirements on federally-sponsoring agencies i.e., administration, staff support, audit, rate negotiation, budget negotiations.

Findings

There has been very little actual university experience with direct charging of space, except for rental of non-university space for specific projects. Any evaluation of direct charging is necessarily judgmental. Nevertheless, it is important to make these judgments to focus on the consequences of moving to a direct charge method. The Task Force found:

There is no university currently applying any form of direct charging facilities costs for university-owned space.

All three conceptual models could make facilities costs visible to both the principal investigator and the peer reviewers.

The Minimalist Model could be implemented without placing a burden on administrators, administrative systems, or federal agencies. However, including space as a direct cost component would likely result in Universities encumbering these costs, thereby, limiting the flexibility of the PI to manage the direct costs of a project.

There is strong agreement among universities that implementing either of the other two models, Direct Charge Facilities Users: Average Square Foot Concept or Direct Charge Facilities Cost by Project, would adversely affect research institutions and sponsoring agencies. While there may be some positive benefits associated with direct charging, these advantages appear less compelling to universities. Federal representatives generally agree that the disruption caused by direct charging of facilities could be considerable, and are not convinced that this approach would yield net benefits.

As an institution increases the detailed identification of space costs to an investigator's room or project, there is an increased probability of contention between the researcher and the campus administrators.

Conclusion

The FDP concludes that implementing a system of direct charging facilities costs would place a tremendous new cost and burden on the university community. Faculty and university administrators are strongly opposed to OMB's proposal to subject a greater portion of research costs to the peer review process by charging facilities costs directly to specific research grants and contracts. There is moderate resistance among federal grants officials to the prospect of direct charging for facilities costs, at least in part due to the anticipated increased costs. The FDP does not recommend further consideration of development or testing of direct charged facilities (space) costs in order to bring these direct costs to the peer review process.


DRAFT

DIRECT CHARGING OF SPACE

A Study conducted by the Federal Demonstration Project

September 21, 1995

I. INTRODUCTION

On February 1, 1995, Alice M. Rivlin, Director of the Office of Management and Budget (OMB), requested the assistance of the Federal Demonstration Project (FDP) in "developing and testing ways to subject a greater portion of research costs to the peer review process by charging facilities costs directly to specific research grants and contracts." [Letter from Alice M. Rivlin to members of the FDP Executive Committee, February 1995.] The FDP agreed to assist OMB and to provide a report to OMB by October, 1995. [The FDP - a cooperative effort among more than fifty universities or research institutes and ten federal agencies - is designed to improve the management of federally-funded research. The Government-University-Industry Research Roundtable (GUIRR) of the National Academy of Sciences coordinates the FDP. A list of FDP member institutions is provided in Enclosure A.] In discussions with OMB officials, the FDP determined that the problem at hand was two-fold: Can one develop models to direct charge space? and, Should institutions and the government institute a system of direct charging facilities costs? In March 1995, the FDP formed a Task Force to prepare this report and throughout the next several months, while conducting its analysis, the Task Force held various meetings with interested parties.

This report represents the FDP's analysis and recommendation on the feasibility and desirability of direct charging facilities costs. The study is divided into eight sections. Section II provides background information on the issue of direct charging along with key definitions of indirect and direct costs. Section III describes the research approach taken by the FDP and highlights critical questions and assumptions. Section IV describes the current method used to charge space. Section V describes three direct charge models. Section VI defines the criteria used to assess the three models. Section VII lists the FDP's findings and Section VIII provides the FDP's conclusion.

II. BACKGROUND

Over the past several years there has been tremendous concern over the growth of federal support for research. The costs of research continue to increase and present a significant problem in times of tight funding. Since 1991, the indirect costs that universities charge federally-sponsored agreements have been the subject of increasingly intense Congressional scrutiny.

The convergence of several factors sparked the current intense congressional interest in the indirect cost component of research. First, there were cases of universities including inappropriate costs in the calculation of overhead rates. Second, budget pressures of the 1990's limited the monies available to fund both the direct and indirect costs of academic research. Third, the nature of what is included in indirect costs as specified by A-21 is complex and understood only by "the experts." Fourth, the variation in indirect cost rates combined with the complexity of the A-21 method of calculating rates appears to challenge the reliability and credibility of the process. The convergence of these factors led to three trends: a shift from generally accepted cost-accounting principles to a price-based system to reimburse indirect costs; a simplification of indirect cost calculations; and identification of methods to limit the federal government's exposure to variability and increasing university facilities costs.

OMB Circular A-21, Cost Principles for Educational Institutions, defines both direct and indirect costs:

Direct costs: Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect costs. Where an institution treats a particular type of cost as a direct cost of sponsored agreements, all costs incurred for the same purpose in like circumstances shall be treated as direct costs of all activities of the institution.

Indirect Costs: Indirect costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. At educational institutions such costs normally are classified under the following indirect cost categories: depreciation and use allowances, general administration and general expenses, sponsored projects administration expenses, operation and maintenance expenses, library expenses, departmental administration expenses, and student administration and services.

Since 1991, OMB revised A-21 twice. A set of changes is currently pending. The thrust of the earlier revisions was clarification, simplification of cost principles, and limits on administrative costs. Under the revisions currently pending, OMB plans to evaluate new methods of assessing and simplifying facilities costs. These pending revisions specifically propose separating the indirect costs into two separate components: facilities costs and administrative costs. OMB, through its request to the FDP, has expressed an interest in seeing if a new allocation methodology can be developed that would direct charge facilities costs to grants and contracts. Because of the nature of facilities costs, separating these costs and categorizing them as direct costs is incompatible with the current definition of direct costs. Nonetheless, some individuals argue that direct charging of facilities costs would provide institutions with an incentive to allocate space efficiently as well as provide a more precise understanding of the actual costs of research.

III. METHODOLOGY

In considering the issue of direct charging facilities costs, the FDP agreed that, faced with a variety of different ways to implement direct charging but a dearth of actual experience, the study could not recommend a specific model for direct charging space to be applied nationally, but, rather, it could identify concepts for several models which would allow for direct charging of facilities costs, and it could evaluate the implications of utilizing these models. -

Research Questions

After several discussions with OMB officials, the FDP determined that the problem at hand was two-fold: Can one develop models to direct charge space? and, Should institutions and the government move to institute a system of direct charging the costs of space? The first question, "Can one develop models to direct charge space?" is essentially an accounting issue requiring the evaluation of existing models and/or the development of new models that would allow for direct charging of space costs to specific projects. In addressing this question, the FDP evaluated several models.

The second question, "Should institutions and the government implement a system of direct charging space?" is essentially a policy question requiring input from the various parties involved in federally-sponsored research to determine the effects that such a change might have on the research enterprise. The FDP sought participation from individuals within university research institutions and the federal agencies to assess the impact of direct charging space.

Assumptions

In order to address the two questions raised above, it was necessary for the Task Force to identify several underlying assumptions. These include the following:

The Task Force assumes that all five components of facilities costs (building capital, utilities, equipment, operations and maintenance, and libraries) are included in references to space costs.

The Task Force ignores the Cost Accounting Standards' consistency requirement. The study focuses on direct charging of space to sponsored agreements for research facilities only.

Instead of reforming accounting principles, the FDP offers some thoughts on how institutions might apply existing conventions in new ways.

IV. CURRENT METHOD OF CHARGING SPACE

Prior to identifying and evaluating new models of direct charging, it is essential to understand the current guidelines pertaining to facilities costs. OMB Circular A-21 provides federal policy for direct and indirect costs. These requirements serve as the baseline for this study. With respect to indirect costs of facilities, OMB policy is divided into three sections:

Method of calculating facilities costs.

Section E covers base periods, the need and considerations for cost groupings, selection of distribution methods, and the order of distribution.

Section F identifies the indirect cost components, and discusses how to allocated costs to major institutional functions.

A rate is required.

Section G. 1 requires assignment of a rate to each major function, i.e., instruction, sponsored instruction and training, departmental research, sponsored research, and other institutional activities.

The distribution basis is specified.

The rate is applied to Modified Total Direct Cost (MTDC) as the base.

Section G.2 requires applying a rate for a major function to sponsored agreements on the basis of MTDC.

The following assumptions underlie A-21 costing methods:

Research facilities costs are calculated using costs recorded in the General Ledger, classified according to A-21, and allocated to the research facilities pool on the basis of surveys, full-time equivalents (FTE), or salaries and wages.

The averaging concept, i.e. allocating facilities costs based on mathematical averages of facilities costs divided by MTDC dollars, is accepted as fair, reasonable, practical, efficient, in aggregate over time.

All projects consume equal amounts of research facilities per MTDC dollar.

Establishing average facilities costs based on surveys, allocations of FTE involved in research, at one point in time and "fixing" the resultant facilities rate for predetermined rate periods from 2-5 years, is sufficiently accurate to meet the needs of the government.

Institutions bear the financial burden to pay for facilities. Facilities are provided by the institution to principal investigators (PIs) without a direct charge to PIs.

Facilities costs are calculated as a facilities rate. The facilities rate is combined with the administrative rate into a combined percent. This combined rate is applied to the base of MTDC which provides the total indirect costs dollars per project.

Facilities costs are not visible to principal investigators or peer reviewers because they are not stated separately.

The total indirect cost dollars are shown in proposal budgets below the MTDC budget elements.

V. MODELS FOR-DIRECT CHARGING SPACE

Facilities costs can be directly charged to projects in a variety of ways. Three models are discussed below to illustrate the range of issues involved in direct charging facilities costs. For purposes of this study, "model" means a general design to meet objectives and not a rigorous, well-defined description of a theory or system. The Task Force identified several outcomes that OMB might hope to achieve in developing a model to direct charge facilities costs. These include:

Provide greater accessibility to needed research space by active researchers.

Encourage economies in space construction and operation.

Encourage economies in space utilization by researchers.

Lower university indirect cost rates.

Support cost-containment of federal research programs.

The first model describes two simple methods of making facilities costs visible without departing from the current A-21 approach. The second model direct charges principal investigators for facilities costs. The A-21 average cost concept is the costing basis. The third model explores the possibility of differentiated research facilities costs in lieu of average costs per unit of facilities. Model 3 allocates aggregate research facility costs to buildings and rooms within buildings to develop a "room cost." The "room cost" is then allocated to projects. By shifting the cost objective from projects to rooms, there is a fairly constant inventory of rooms to which costs can be allocated. Room costs are allocated to projects based on room use. The time basis may be on a monthly proportional basis, or fixed for a budget or project period. Under this model, costing concepts are not equal to the precision of A-21 direct costing concepts, but are, in general, a step toward approximating actual, differentiated costs that can be allocated to individual projects.

The Minimalist Model: Separation of the Indirect Cost Components

The Minimalist Model assumes that facilities costs will be controlled if they are visible to PIs and peer reviewers. Under the current system, visibility does not occur because facilities costs are categorized with administrative costs into a combined total indirect cost rate. With little disruption and minimum cost, Options 1 and 2 of the Minimal:st Model allow for visibility of facilities costs as either a discrete indirect cost element or as a direct cost element. These options do not depart from the current A-21 methods of calculating, allocating, and pricing of facilities costs.

Option No. 1 separates the facilities component from the total indirect cost rate. The facilities component is multiplied by the MTDC base which provides a dollar cost for facilities: The same calculation is performed for the administrative component of the indirect cost rate. Both the facilities and administrative components are stated separately as indirect costs in terms of percents and dollars.

                    $100,000   MTDC
                    ________
                      24,000   24% Facilities
                      26,000   26% Administrative
                    ________
                    $150,000   Total

Option No. 2 is similar to Option No. 1 except that the facilities cost component is stated "above the line" as a direct cost.

                    $100,000   MTDC
                      24,000   Facilities
                    ________
                      26,000   26% Administrative
                    ________
                    $150,000   Total

Direct Charge Facilities Users: Use Average Square Foot Concept

This model continues the A-21 method of calculating facilities costs for all facilities elements. However, it shifts the base for allocation of facilities costs from Modified Total Direct Costs (MTDC) to Usable Square Feet of Research Facilities (R-USF). The pool of research facilities costs for one year is divided by the available USF identified as research space. The result is a rate, a unit price, of research facilities per R-USF, per year.

Under this model, the quantity of R-USF is fixed at the outset of an award, for a minimum of a budget period, or the entire project period. Independent of other projects, an R-USF is estimated and fixed for each project. This assumes that any possible overages will be balanced by possible gaps. The avenging concept is used to calculate the cost for R-USF. Fixing the quantity of space and the cost for the period of the award is consistent with the current A-21 method of calculating space cost, and fixing the rate for the rate years covered under the predetermined rate. This model simplifies implementation and does so in a way that is consistent with A-21 costing principles.

All of the current direct costs recognized by A-21 are included in this model. Facilities costs are calculated by multiplying a quantity of R-USF by the R-USF unit price. This total value can be presented either as an indirect cost component, see Option 3, or as a direct cost element, see Option 4.

Option No. 3 separates the facilities component from the indirect cost rate.

                    $100,000   MTDC
                    ________
                      24,000   1000 R-USF x $24.00
                      26,000   26% Administrative x MTDC
                    ________
                    $150,000   Total

Option No. 4 presents the facilities cost as a direct cost budget element.

                    $100,000   MTDC
                      24,000   1000 R-USF x $24.00
                    ________
                      26,000   26% Administrative x MTDC
                    ________
                    $150,000   Total

Direct Charge Facilities Cost by Project

This model explores the possibility of differentiated research facilities costs in lieu of avenge costs per unit of facilities. The model allocates aggregate research facility costs to buildings and rooms, within buildings, to develop a "room cost." The "room cost" is then allocated to projects. By shifting the cost objective from projects to rooms, there is a fairly constant inventory of rooms to which costs can be allocated. Under this model, room costs are allocated to projects based on room use. The time basis may be on a monthly proportional basis, or fixed for the budget or project period.

Shifting from the strict A-21 principles of actual direct costing to composite costing procedures, enables the use of avenges, actuals, or differentiated estimates to accommodate the degree of financial costing data available in an institution's records and the differences in types of facility components. This can relieve the practical difficulty of the A-21 direct costing concepts.

The composite costing concepts used in this model are not equal to the precision of A-21 direct costing concepts, but are, in general, a step toward approximating actual, differentiated costs that can be allocated to individual projects.

A. Review of Facilities Components and Determination of Costing Method

Institutional accounting systems and general ledgers contain detailed expenditure data used in preparing an indirect cost proposal. The chart of accounts describes sources and uses of funds. Some data are identified directly with buildings. Some data are identified with organizational functions, which can be linked to buildings by an extra processing step. Some data cannot be, or are not, linked to specific buildings. To the extent facilities expenditures can be identified by building or room, this can be done. To the extent facilities expenditures are not, or cannot be, practically linked to a building or room, average cost allocation methods can be used. The following considers whether facilities components are more likely to be averaged or differentiated.

Building Capital Costs

Each building included in an indirect cost proposal has a value. The value is increased by major renovations or the addition of fixed equipment. Building use, or depreciation, is calculated on the basis of the building value. Where buildings are financed there is an interest cost. All of these costs are, or can be, building specific. It is on this basis that building costs among buildings can be differentiated. The total building cost may be allocated to all rooms in the building. The allocation may reflect differences in room type e.g. reflecting degrees of equipment intensity, utilities consumption, or by average cost per usable square foot. Model #3 will differentiate building capital costs among buildings, and possibly by room where the cost elements by room are discrete and measurable.

Utilities: electricity, water, sewer, and other utilities-related costs.

Electricity consumption in theory can be measured in aggregate for the institution, or by complex, by building, by room, or by individual items of equipment. There may be some measure by building, but rarely by room or by item of equipment. If consumption data is available by building, the cost can be averaged and applied uniformly to all rooms. Rooms may be categorized by room type and by consumption rates. Rooms with intense equipment or other demands on electricity can be allocated a higher portion of electricity and electricity-related cost than rooms with very little equipment.

Water and sewer are usually relatively low cost consumables with little differentiation among buildings and rooms. These costs can be allocated on an average basis, if other more precise methods are not available.

Equipment Costs.

Equipment costs are recovered by an equipment use allowance or depreciation. If current equipment inventories are available which include equipment items, values and room locations, equipment costs can be allocated by room.

Operations and Maintenance.

O&M includes many functions and costs which are not easy to identify by building. These costs can be averaged, if other more precise methods are not available.

Libraries.

The extreme of costing precision required by direct costing of library costs is to tag every person charged to a sponsored project and accumulate a specific cost per unit of time they use library services for work required by the sponsored award. This is not practical. Using methods prescribed by A-2 1, the total library cost can be allocated by average cost, by room.

B. General Allocation Method

The general allocation method (GAM) can be used to allocate any kind of cost to any kind of cost objective. This method can be applied to allocating research facilities costs to individual sponsored agreements. This method is described graphically below.

                       University General Ledger
                      Costs by facility component
                allocable to organized research function

                                    |
                                    |
    --------------------------------------------------------------------
    |                    |                       |                      |
Bldg. #1             Bldg. #2                Bldg. #3               Bldg. #4
                                                 |
                                                 |
          ------------------------------------------------------------
         |                 |                  |                       |
     Room #1           Room #2            Room #3                 Room #4
                                              |
                                              |
          ---------------------------------------------------
         |              |               |                    |
     Proj. #1       Proj. #2        Proj. #3              Proj. #4

GAM relies on A-2 1 principles and methodology for developing facilities costs by component which are to be allocated to organized research.

GAM has three allocation steps:

1. Allocate aggregate research facilities costs to the buildings used for organized research.

2. Allocate research facilities cost by research building to each room within the building.

3. Allocate the "room cost" to the project(s)in each room.

C. Allocation of Facilities Cost by Component to "Room Cost."

After determining which facilities components can be differentiated from those which must be avenged, the methodology of calculating "room cost" can be decided. For the sake of discussion and illustration, candidate facilities components for avenging costs allocation are utilities (U), operation and maintenance (O&M), and libraries (L). Candidates for facilities components for differentiation cost allocation are building capital costs (BCC) and equipment (E). The "room cost" is the sum of the per square foot of avenged costs plus the differentiated costs.

The avenge costing method results in an avenge cost per square foot of usable research space for Utilities (U), Operations and Maintenance (O&M), and Libraries (L).

Average Costing Method: for Total U + O&M + L

Step 1. Calculate the total cost of U + O&M + L.

Step 2. Calculate the total usable square feet of research space. (R-USF)

Step 3. Divide the result of Step 1 by Step 2 to determine the avenge square foot cost for U + O&M + L.

Step 4. Multiply the R-USF by room by the result in Step 3 to obtain room cost for U + O&M + L.

The differentiated costing method results in a cost per square foot which may be unique to one or a group of rooms, or at a minimum, by rooms within a building. The method is designed to account for differences in actual cost where they can be determined. This method may be applied to Building Capital Cost (BCC) and Equipment (E). See below.

Differential Costing Method: for BCC + E.

For BCC:

Step 1. AccumuIate interest cost, construction, renovation, fixed equipment values which benefit the total building by building.

Step 2. Calculate the total usable square feet of research space in the building.

Step 3. Divide the result of Step 1 by the result of Step 2 to determine the avenge cost per square foot of research space in a building. If financial data are available to associate specific costs to particular room(s), the calculation of room costs may be refined accordingly.

For E:

Step 1.Identify the fixed and movable equipment which benefit specific rooms.

Step 2. Calculate the cost of this fixed and movable equipment and allocate by room on the basis of useful life.

The total "room cost" is calculated as follows:

The total "room cost" is the sum of:

1. Room cost for average facilities components --- U + O&M + L.

2. Room cost for differentiated building capital costs --- BCC.

3. Room cost for equipment --- E.

D. Presentation of "Room Costs" in Proposal Budgets.

All facilities components, both differentiated and averaged, can be allocated to the "room cost" and charged as a direct cost-, see Option 5. Or the facilities costs recovery can be bifurcated. The differentiated components can be allocated to the room cost and charged directly, and the averaging components can be converted into a percent and recovered separately as an indirect cost. See Option 6.

Option 5. Charge all facilities components to the room cost, and charge the room cost as a direct cost.

                     $100,000    MTDC
                       24,000    Facilities by room cost
                     ________
                       26,000    26% Administration IDC
                     ________
                     $150,000    Total

Option 6. Charge differentiated facilities component cost by room as a direct cost, and average facilities components as an indirect cost.

                     $100,000    MTDC
                       10,000    Differentiated facilities
                     ________
                       14,000    14% Averaged facilities
                       26,000    26% Administration IDC
                     ________
                     $150,000    Total

VI. CRITERIA FOR EVALUATING DIRECT CHARGING MODELS

The purpose of direct charging of facilities is to subject them to greater scrutiny by principal investigators, by administrators, and by peer reviewers so that facilities will be built and used in an efficient manner. Direct charging may impose new demands on metering and accounting systems, however, so the desired gains in managerial efficiency must be weighed against any additional administrative burden associated with direct charging. In addition, direct charging must be considered in light of the potential impact such a change would have on the research environment. Direct charging can be evaluated according to many criteria. The following criteria capture the main features involved in this tradeoff:

Impact on the Principal Investigator

Does the model improve the ability of the Principal Investigator to use and pay for only those facilities he or she judges to be necessary to do research? Does the model have an impact on the type of research a PI can conduct and support?

Impact on the Peer Review Process

Does the model allow peer reviewers to evaluate the extent of facilities use planned and the associated costs? Can the peer review process objectively determine the type and amount of space necessary to conduct research? Does the model require a significant restructuring of the peer review process?

Impact on Academic Administration and Campus Collegiality

Does the model encourage administrators to invest in facilities that are of the highest priority? Does it encourage administrators to allocate the costs of facilities to their users? Does it place stresses on administrators' relationships with faculty and staff?.

Administrative Burden

Does the model impose prohibitive administrative costs and complications on research universities, university administrators, and faculty? Can the model be implemented with existing or reasonably available tracking and accounting systems?

Impact on Federal Agencies

Does the model impose burdensome requirements on federally-sponsoring agencies i.e., administration, staff support, audit, rate negotiation, budget negotiation.

VII. FINDINGS

There has been very little actual university experience with direct charging of space, except for rental of non-university space for specific projects. Any evaluation of direct charging is necessarily judgmental. Nevertheless, it is important to make these judgments to focus on the options that appear to provide the best balance between enhanced efficiency and administrative ease, so that more detailed planning and evaluation can be devoted to those options that have the greatest potential to make a contribution toward improved practice. The Task Force found:

There is no university currently applying any form of direct charging facilities costs for university-owned space.

All three conceptual models could make facilities costs visible to both the principal investigator and the peer reviewers.

The Minimalist Model could be implemented without placing a burden on administrators, administrative systems, or federal agencies. However, including space costs as a direct cost component would likely result in Universities encumbering these costs, thereby, limiting the flexibility of the PI to manage project costs.

There is strong agreement among universities that implementing either of the other two models, Direct Charge Facilities Users: Average Square Foot Concept or Direct Charge Facilities Cost by Project, would adversely affect research institutions and sponsoring agencies. While there may be some positive benefits associated with direct charging, i.e., provides incentives to manage space more efficiently, these appear less compelling to universities. Federal representatives generally agree that the disruption caused by direct charging of facilities could be considerable, and are not convinced that this approach would yield net benefits.

As an institution increases the detailed identification of space costs to an investigator's room or project, there is an increased probability of contention between the researcher and the campus administrators.

The following concerns were raised by the Task Force:

Impact on the Principal Investigator

1. PI's are concerned about the skewing of on-going productive research programs by pressures to accommodate only those funded projects that can pay for space. What happens to low income generators? Would faculty have to give up space when funding dries up or if there is a lapse between funded projects? Who pays for the (perhaps, temporarily) empty space?

2. Considerable investment in PI/staff training would be necessary to accurately budget and justify space costs for proposal preparation and subsequent award negotiation. It is unknown whether the cost of such training would be offset by better informed and knowledgeable faculty and administrators who previously had not appreciated the real costs of space utilized in research.

3. Under direct charging there would be an environment of uncertainty. A PI who is at some point working on many projects, and who loses funding for one or several projects, may have to halt work on one of his other projects while he relocates to affordable space.

Impact on the Peer Review Process

1. The overriding concern regarding the peer review process is the prospect of confusing the scientific evaluation of technical merit, the traditional objective of peer review, with cost analysis. Traditionally, peer reviewers have used budget proposals as a source of information regarding a PI's technical understanding of a project's requirements. It is not obvious that peer reviewers can judge estimated space cost needs, or the functional activities possible in the space allocated to the PI.

2. Workloads in agency program and management offices would be affected. Agencies have reported that they would need to overhaul peer review systems, perhaps with a second level of budgetary review to look at these costs rather than at the science proposed by the PI.

3. Agencies may find that questions of space needs are distorting the peer review process. It is conceivable that reviewers might pay more attention to square footage estimated than to the science proposed.

Impact on Academic Administration and Campus Collegiality

1. The most significant negative outcome expressed by academic administrators to the proposal to direct charge facilities costs is the potential interference with internal academic programs. Teaching functions do not fully pay for space (tuition does not cover the costs of instructional space), consequently "rent" paying research space could drive out teaching lab space.

2. Space commitments for interdisciplinary programs are already a contentious matter. If recovery of direct funds for the proposed space became a factor in the formulation of new interdisciplinary ventures, cutting-edge programs extending the boundaries of traditional disciplinary efforts might well get bogged down in political negotiations. Interdisciplinary or organized research units may fare poorly under this scheme.

3. Research space is not fungible between researchers. Labs are typically renovated and committed to a researcher to support a certain type of activity. If the source of funds to pay for the lab is linked to what can be recovered directly, it may not be prudent or feasible to reassign the space for another "paying" researcher.

4. There may be a loss of productive research space with moving of labs and reassignment of "choice" space. There is the potential of an ironic culture change: typically faculty have coveted new research space because it is more efficient and generally more practical in terms of electrical and HVAC support; however, if this space is more expensive than a nineteenth century laboratory building, there may be aggressive competition for old space, even if the older space is less-suited for the current research.

5. Departmental and dean-level staff are the principal space overseers. The inevitable prospect of contentious space assigning, renovating, monitoring, and cost-recovering processes is frequently cited by these offices as a serious concern regarding the proposed direct charging concept.

6. PI's may be motivated to underestimate their actual space needs for a project to minimize the direct charge to themselves. This would not be fair to the institution. This may require institutional administrative procedures to verify the actual space required with the amount identified by the PI.

Administrative Burden

1. The administrative burden of tracking and justifying detailed, direct space costs allocations is likely to be considerable. Such systems are not available within current cost-accounting and space cost allocation models.

2. The potential financial burden of any new system developed to determine space costing at the project level must be considered. These are not costs that should be imposed on the universities. Averaging of space and facilities costs derived from using existing costing studies may be the result, with the consequence that no better information is available when the costs are displayed as Direct Costs than when the costs were contained in the Facilities Component of the indirect cost rate.

3. While a number of institutions can and do have systems that budget for space costs at the departmental or building level, the sophisticated system required to account for space costs on a project-by-project basis, in an environment of simultaneous use of space by multiple projects and multiple functions, or investigator-by-investigator appears to be considerable.

4. New procedures would be needed to handle abandoned space and partially-used laboratories.

5. Most institutions have fewer than ten indirect cost rates for on and off-campus by the three major functions. Some have special rates in addition. If the total number of university research buildings were known as well as the total number of rooms for which a room rate would result under Model 3, the number would be in the thousands. The administrative cost to institutions and Federal Audit Agencies as well as the delay in developing rates would be large.

Impact on Federal Agencies

1. Depending on the costing model selected, and the extent of incorporation into the peer review process, significant additional administrative costs would be borne by the Federal Government.

2. Agencies are likely to need OMB budget reviews to support resource shifts for space costs. For example, NIH may require additional funds to cover space-intensive research, whereas, NEH, and other sponsors of mathematicians and theorists, may get by with smaller research budgets.

Agencies that have not funded indirect costs or that have capped reimbursements might now find that space costs budgeted as direct costs require additional funds to cover these items or that they now need to substantially reduce the number of grants funded. Realistically, agencies are not likely to get more funding and so most institutions likely would absorb the percentage of direct costs associated with space costs. Colleges and universities are concerned that this process would ultimately require additional documentation of mandatory cost-sharing by the grantees.

3. If regulatory changes eliminated allowability of space costs as direct charges for some agencies (especially those with capped indirect cost allowances), the cost of such regulatory changes should be factored into the consideration of costs/benefits of direct charging.

4. Agencies would have to revise their indirect reimbursement practices.

5. Federal audit expectations may require verification of actual Project #R-USF by project as often as dally. This will require a new administrative process.

6. Institutional indirect cost rates are reviewed, audited, and approved either by the DHHS Division of Cost Allocation or Office of Naval Research. It is not clear whether "room rates" will be viewed as the equivalent of indirect cost rates and be subject to review and audit by these Federal Agencies. If yes, there would be a major increase in the Federal audit and negotiation effort.

7. One OMB objective is increased simplicity and consistency. Differential costing, particularly with variations in institutional accounting systems and degree and kind of financial data available, taken together with thousands of room rates, would increase complexity and variation.

8. With the proliferation of room rates, it would be very difficult for the federal agencies or institutions to determine the aggregate financial cost/recovery from differentiated facilities costs.

9. Federal agency grant and contract officers would face a maze of room rates which would overload DHHS DCA and ONR trying to verify the rates.

VIII. CONCLUSION

The FDP concludes that implementing a system of direct charging facilities costs would place a tremendous new cost and burden on the university community. Faculty and university administrators are strongly opposed to OMB's proposal to subject a greater portion of research costs to the peer review process by charging facilities costs directly to specific research grants and contracts. There is moderate resistance among federal grants officials to the prospect of direct charging for facilities costs, at least in part due to the anticipated increased costs. The FDP does not recommend further consideration of development or testing of direct charged facilities (space) costs in order to bring these direct costs to the peer review process.

Enclosure A

Federal Agencies

Air Force Office of Scientific Research
Army Medical R&D Command
Army Research Office
Department of Energy
Environmental Protection Agency
National Aeronautics and Space Administration
National Institutes of Health
National Science Foundation
Office of Naval Research
Department of Agriculture

Contract/Grantee Organizations

California Institute of Technology
Columbia University
Cornell University
Dartmouth College
Emory University
Johns-Hopkins University
Northwestern University
Ohio Consortium
Ohio State University University of Cincinnati
Case Western Reserve University
Research Foundation of the State University of New York - all campuses, including but not limited to:

State University of New York at Albany
State University of New York at Binghamton
State University of New York at Buffalo
State University of New York at Stony Brook
The Health Science Center at Brooklyn
The Health Science Center at Syracuse
The College of Environmental Science and Forestry at Syracuse

SRI International
State University System of Florida:

Florida State University, Tallahassee
University of Florida, Gainesville
University of South Florida, Tampa
Florida A&M University, Tallahassee
University of Central Florida, Orlando
Florida Atlantic University, Boca Raton
University of West Florida, Pensacola
University of North Florida, Jacksonville
Florida International University, Miami

Texas Consortium:

Baylor College of Medicine Rice University
Texas A&M University System at College Station


Texas Tech
University of Houston
North Texas
University of Texas System

University of California System: University of California, Berkeley
University of California, Davis
University of California, Irvine
University of California, Los Angeles
University of California, Riverside
University of California, San Diego
University of California, San Francisco
University of California, Santa Barbara
University of California, Santa Cruz
University of California, Division of Agriculture and Natural Resources

University of Chicago
University of Hawaii
University of Lowell Research Foundation
University of Miami
University of Michigan
University of Southern California
University of Virginia
University of Wisconsin at Madison


ATTACHMENT E

REPORT 104-209

DEPARTMENTS OF LAB0R, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND RELATED AGENCIES APPROPRIATION BILL, 1996

REPORT OF THE COMMITTEE ON APPROPRIATIONS together with DISSENTING AND SEPARATE VIEWS [To accompany. H.R. 2127]

JULY 27, 1995

* * *

Indirect costs.--The Committee has expressed its concerns in the past about the current method for reimbursing the indirect costs associated with research. It continues to be an area of great concern. The Committee believes this is a key area in which savings could be generated, which could then be plowed back into the direct costs of research. It could also have the welcome side benefit of reducing administrative burdens, both for the Department and the institutions receiving NIH grants. The Committee views the Administration s indirect cost proposal as a useful start--particularly its proposal to end reimbursement for tuition payments for university employee dependents, which the Committee urges the Administration to finalize--but believes the system needs more fundamental reform. The Committee is intrigued by the development of the so-called "Phoenix Plan" by a group of university officials, which explores the potential of moving from a cost-based to a price-based system of reimbursement, comparable to the reforms implemented in the Medicare program in the 1980s. The Committee encourages the creators of the Phoenix Plan to conclude their study as quickly as they can, and urges NIH and the Office of Management and Budget to fully cooperate with their efforts. The Committee also notes that the House Science Committee is drafting legislation to require the Office of Science Technology and Policy to complete a study by the end of the year identifying the best ways to achieve a ten percent reduction in indirect cost reimbursement gov-ernment-wide. The Committee awaits the outcome of that study with interest. In short, the Committee believes it is important to continue to scrutinize the current indirect cost system. While it is aware of the complexity and the controversy of the issue, it does not believe the status quo is sustainable or defensible in an environment of steady or declining resources.


SEP-27-95 WED 10:06

Calendar No. 189

104TH CONGRESS

DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION AND RELATED APPROPRIATION BILL, 1996

Mr. SPECTER, from the Committee on Appropriations, submitted the following

REPORT [To accompany H.R. 2127]

* * *

Indirect costs.--The Committee understands that the administration has issued a comprehensive list of proposed changes to the Federal policies and regulations that govern the reimbursement of indirect costs. The Committee supports these proposed changes which, among other things. will provide greater assurances regarding Federal reimbursement for facilities costs, and require the use of terminology that reflects the actual costs that are to be reimbursed (that is, administrative costs and facilities costs). Last year, the Committee called for the administration to review the practice of charging to research grants the cost of tuition for family members of faculty and staff. The Committee is pleased to see that the administration has included the elimination of this practice in its list of proposed changes and urges the implementation of these changes as soon as possible.

The Committee believes that added to the changes made in 1991 and 1993, the new 1995 proposals reflect significant changes to the Federal system of reimbursement for these infrastructure costs. However, questions about this system persist, and careful consideration should be given to ensuring a system that is simple. predictable, sustainable, and cost effective. The Committee is aware of and supports efforts underway by the university community to explore new and innovative ways to reimburse institutions for the legitimate costs of supporting university-based research and would like to be kept informed of these efforts. The Committee also urges the community to work closely with the Federal research> agencies, the Office of Science and Technology Policy, and the Office of Management and Budget as proposals for reform move forward. Finally, once a new method for reimbursement has been agreed upon, the Committee believes that thoughtful planning and ample time should be given to the transition process.


ATTACHMENT F

COLUMBIA UNIVERSITY INTERDEPARTMENTAL MEMORANDUM

Office of Projects and Grants

July 3, 1995

To: Richard Ruttenberg

Subject: Phoenix Plan

As agreed at the Provost's indirect costs meeting we attended last week where a request was made for comments on the Phoenix Plan to be forwarded to you, I present below my comments:

1. The plan is a bare outline; it is impossible for Columbia to determine how we would fare under it. This would be OK at this stage, if the plan had not been essentially "sold" to OMB and OSTP and to just about every major association (AAUP, AAMC, COGR).

2. The plan advertises savings in not having to calculate and negotiate indirect costs rates; and in saved audit costs. These costs are almost all fixed costs which will result in few saved dollars.

3. There would be a problem to be worked out for institutions such as Columbia when the move is made from fixed-with-carryforward rates to fixed rates.

4. The so-called "Base Rate" to which all regional and other adjustments would be applied are "based on all assessment of the average, actual costs now incurred by representative institutions." Columbia as a high rate institution would be sure to lose here if average costs are calculated for representative institutions.

5. A very important element of the plan is the so-called research mix factor, which would vary with the science disciplines' use of facilities. Nothing is determined about these factors: how they would be calculated; for which grouping of sciences; by what authority?

6. Utility and construction costs would be based on regional costs. If the regions are too broad, Columbia could lose here also.

7. I am opposed to the use of the 26% cap for the calculation of the administrative portion of the plan. It is arbitrary and could too easily be lowered to limit indirect costs recovery after the plan was worked out. The cap is hardly a cost factor rate, a phrase by which the authors advertise their system.

Although the plan is an interesting concept it is hoped that others will recognize we are being sold a system totally untested, for which the results are completely unknown at this time.

James P. Lewis
Executive Director

cc: Dr. Michael M. Crow


ATTACHMENT G

[Slides not scanned]


ATTACHMENT H

Institutions Participating In Selected Electronic Research Administration Activities

 Participating                            FDP          NSF       FIE/DOE
  Institution                         Participant   Fastlane       EDI

 Baylor College of Medicine                X                        X
 Ohio State University Research Foundation X            X
 Texas A&M Research Foundation             X            X
 University of California (Berkeley)       X            X
 University of California (Los Angeles)    X            X           X
 University of Chicago                     X            X
 Arizona State University                               X
 Delaware State University                              X
 Duke University                                                    X
 Fred Hutchinson Cancer Institute                                   X
 Massachusetts Institute of Technology                  X           X
 New Mexico State University                            X
 Pennsylvania State University                          X           X
 Purdue University                                      X
 Santa Rosa Junior College                              X
 Southern Illinois University                           X
 Southern University (Baton Rouge)                                  X
 University of Notre Dame                                           X
 University of South Carolina                           X
 University of Washington                               X
 Virginia Polytechnic University                        X

 Total                                     6           16           8

21 -Sep-95


ATTACHMENT I

Report from the Task Force on Electronic Communications

Meeting Report for September 21, 1995

Attendees:

James Ball, Grants & Contracts Management, Ohio State University Research Foundation (co-chair)

Jean Morrow, Office of Energy Research, Department of Energy (co-chair)

Diana Jaeger, Office of Extramural Research, National Institutes of Health

Wayne Jennings, Office of Sponsored Programs, University of Virginia

James Kemp, Office of Research Administration, Case Western Reserve University

Bill Kirby, Office of information & Research, National Science Foundation

Bradley Stanford, Program Analysis, Office of Naval Research

Sarah Wasserman, Grant & Contract Administration, University of Illinois at Urbana-Champaign

The Task Force on Electronic Communications met on Thursday afternoon, September 21, 1995, to further consider FDP's role regarding electronic commerce or "electronic research administration" (ERA). A structured brainstorming session was led by Bill Kirby in order to clarify and define what role the FDP "can" and "should" play in ERA.

The consensus of the sub-committee was that "computer technology" is merely a means for achieving more effective and efficient systems in the administration of government-sponsored, university-based projects. It was therefore agreed that our overarching mission was to "re-engineer" the "sponsored project administration system" to take advantage of computer technologies currently available, as opposed to making current processes electronic.

A number of issues and opportunities were identified that led the sub-committee to conclude that the time is right to give serious consideration to this "re-engineering" focus:

· The pressure to control the administrative costs of sponsored projects continues to mount for both universities and agencies, as do the regulatory and compliance requirements. The challenge facing both sectors is to do a "better job" of administration with "static or declining' resources.

· Computer technology creates the opportunity for streamlining and automating many labor intensive administrative
processes, thereby enabling the transfer of scarce resources to more productive and strategically critical uses.

· A number of efforts to re-engineer administrative systems have been initiated by both universities and agencies, but to date no organized government-university "systems view" of the re-engineering process has emerged. This conceivably poses both an opportunity and a risk. Opportunities may lie in the lessons that will be drawn from the various initiatives that are currently underway. However, the unilateral implementation of new, electronic processes by one or more agencies may pose a risk to universities who are not prepared to adapt or who go in the wrong direction prematurely. Indeed, initiatives that are carried out without full recognition of the interdependency of the various sectors in the research enterprise may, in the short-term, produce even greater stress on the research enterprise (and, concomitantly, the waste of time and money).

For example, the EDI initiative has the potential for great future benefit as it will establish data standards for electronically transmitting proposals from universities to the agencies. These standards will be adopted by industry as they produce software for the university market (theoretically increasing productivity at lower cost for all concerned). While there are clearly benefits to EDI, it also poses serious challenges to universities to accommodate a new, electronic method of submitting proposals. Any solution to this challenge will require new software products and necessary hardware to enable a university to effectively and efficiently submit an electronic proposal (while avoiding duplicate data entry). This challenge, therefore, mandates a re-engineering of the entire pre- and post-award process at most universities, as well as at most federal agencies. Many of these universities and agencies may not be prepared to undertake this challenge.

Upon reviewing these and other issues and opportunities, the sub-committee agreed that the FDP, through its composition, influence, and leadership, was in a unique position to facilitate collaboration and coordination among federal and university participants. This position enables the FDP to take a systems view (by way of a focus on the agency-university interface) to promote communication and develop demonstrations.

Specifically, the sub-committee identified the agency-university interface, where information is exchanged throughout the research administration (or sponsored project) process (from the identification of funding opportunities through award close-out) as the point where attention should be focused:

· It is at this interface where opportunities exist to re-engineer the research administration process to more effectively serve the goal of improving research productivity and reducing bureaucratic accretion;

· The FDP can also serve as a forum to communicate the results of demonstrations and experiments involving re-engineering and ERA;

· The FDP can serve as a clearinghouse of inforrnation on successful implementations;

· The FDP can utilize collaborations to develop demonstrations for research administration reengineering efforts using enabling electronic technologies (such as common data dictionaries and transaction standards, use of the World Wide Web, common databases for information sharing, and so on).

Recommendations:

· Session at Annual Meeting

The sub-committee proposed that the December, 1995, Annual Meeting include a session, perhaps an entire day, devoted to the theme of opportunities created for re-engineering through the implementation of ERA. In line with our communication strategy, we think it would be beneficial for FDP members to hear from a number of university representatives about their experiences with re-engineering and electronic research administration. Russ Lea, from North Carolina State University, was recommended to present their experience with the implementation of the GAMS pre-award system. Also suggested, was inviting a representative from Duke University or MIT to discuss their experience with the USDOE EDI demonstration. In addition, an active NSF FastLane university should be invited to present their experiences. This proposal was recommended in lieu of a "vendor show" with software vendors demonstrating commercial packages, although a mini-vendor show might somehow be included as a means of promoting discussion with industry. Finally, it was suggested that the Annual Meeting also include a mechanism for eliciting and identifying major issues and opportunities at the "interface" between universities and agencies.

· Electronic Award Notices

The sub-committee also proposed that the transmission of award notices electronically, using an EDI format, be made a high priority. ONR has already developed the common data set and EDI standard for awards in its electronic contracting efforts. Such an effort would speed the transmission of award data to and within universities, as well as reduce redundant data entry on the part of university staff.

· Phase II Demonstrations

The sub-committee recommends that the Steering Committee consider the "strategic role" that electronic technologies and a re-engineering approach might play as it formulates the nature of Phase II of the FDP.

· Sub-Committee Administration

The sub-committee will continue to develop a "list" of ERA initiatives and contacts (attached) and will also create an electronic listserver for the use of its members. It was also recommended that the sub-committee continue to develop its mission and objectives.

Conclusion:

The sub-committee recognizes that the "re-engineering" of the research (or sponsored project) administration system is inevitable and desirable given the current pressures on this system. Enabling electronic technologies are one resource currently available for this purpose, but they may not be effective without the adoption of an overall "systems view." The opportunity to "pro-actively" plan demonstrations, in a strategic fashion, currently exists but may quickly pass.

Last Updated: September 20, 1995

Task Force Members

OSU

Jim Ball (co-chair)
Associate Director
Grants & Contracts Management
Ohio State University Research Foundation
1960 Kenny Road
Columbus, OH 43210-1063
Tel: (614) 292-6278
Fax: (614) 292-4315
Email: ball.6@osu.edu

Florida A&M

Frank Hamilton
Division of Sponsored Research Florida A&M University
404 Administration Building Tallahassee, FL 32307
Tel: (904) 599-3531
Fax: (904) 599-3952
Email:

ARO

Susan Hill
Procurement Office
Research Plaza
Army Research Office
P.O. Box 12211
Research-Triangle Park, NC 27709-2211
Tel: (919) 549-4267
Fax: (919) 549-4310
Email: aro@st.louis.emuhl.army.mil

Diana Jaeger
Office of Extramural Research National Institutes of Health Building 31/5350
9000 Rockville Pike Bethesda, MD 20894
Tel: (301) 496-5967
Fax: (301) 480-8443
Email:

Federal Interagency Working Group on Business Practices. Developing a common face for grantees, so institutions can deal in the same way with any research agency using EDI; NIH ERA Reinvention Committee charged with creating systems that work better and cost less.

SUNY

Charlie Kaars
Assistant Vice President Sponsored Programs
SUNY at Amherst
Admin 520, Lee Entrance, #211 UB Commons
Amherst, NY 14228
Tel: (716) 645-2977
Fax: (716) 645-3730
Email: sponck@ubvm

CWRU

Jim Kemp
Associate Director
Office of Research Administration Case Western Reserve University
10900 Euclid Avenue
Cleveland, OH 44106-7015
Tel: (216) 368-4510
Fax: (216) 368-4679
Email: jwk5@po.cwru.edu

DOE

Jean Morrow (co-chair) Grants Policy Specialist
Office of Energy Research
Dept of Energy
19901 Germantown Road Germantown, MD 20874
Tel: (301) 903-2452
Fax: (301) 903-3884

See FEDIX

SUNY

Anthony Selvadurai
Director
Office of Research Administration Health Science Center
SUNY at Brooklyn
450 Clarkson Avenue, Box 69 Brooklyn, NY 11203
Tel: (718) 270-1178
Fax: (718) 270-1407
Email:

Industry Contacts

AMS

FEDIX

Robert Unger
Project Director
Federal Information Exchange
555 Quince Orchard Road, Suite 200
Gaithersburg, MD 20878
Tel: (301) 975-0103
Email: nmger@fedix.fie.com

Univ/Govt ERA interface system. A two year demo project to standardize the method of electronic generation, submission, and processing of university research proposals to ER/DOE.

GAMS

Jamie McKee
IBM Higher Education Solutions
The Institute for Academic Technology
2525 Meridian Parkway
Durham, NC 27713
Tel: (919) 405-1956
Fax: (919) 560-5047
Email: jamiemckee@vnet.ibm.com
URL: http://ike.engr.washington.edu/GAMS

Collaboration between IBM, NCSU, and USC to develop an integrated system from proposal development through post-award. Some goals: 1.Enable researchers to focus on the content not the process of proposals. 2.Provide quicker response to funding opportunities 3.Decrease campus approval t'nne 4.Reduce personnel effort required to support the proposal process. 5.Increase the quality of grant applications. 6.Incorporate new cost accounting standards 7.Anticipate the federal requirements for electronic submission (EDI). 8.Utilize standards to quickly integrate data from current systems wherever possible.

RAMS

John Rodman
Federal Information Exchange
555 Quince Orchard Road, Suite 200
Gaithersburg, MD 20878
Tel: 301 975-0103
Fax: 301 975-0109
Email: jrodman@fedix.fie.com
URL: http://web.fie.com/
List Server: ERA-REQ@fedix.fie.com

See Unger. Also, maintains an electronic research administration discussion list. Send "subscribe ERA-L your address" to ERA-REQ@fedix.fie.com.

Government Contacts

DOE

Anne Fisher
Tel: (202) 366-4288
Fax: (202) 366-7510

DOE

Rich Stevens
Director
Office of Science Education
DOE

DRG

Nicholas Suszynski
Head, Information Systems
Division of Research Grants
Tel: (301) 594-7238

NIH

Geoff Grant
Grants Policy Officer
Office of Extramural Research National Institutes of Health Building 31/5350
9000 Rockville Pike Bethesda, MD 20894
Tel: (301) 496-5967
Fax: (301) 480-8443
Email: grantg@nih.gov

Limited Electronic Submission System (LESS) with UCLA and USC. Long-term goal to eliminate paper from the grant submission process; NIH/DOE study to handle grant applications by next June with 8 participating universities (MIT, Notre Dame, Southern U, Penn State, Baylor, Fred Hutchinson, UCLA). Known as ERA. Will start with "application shell" and post-award electronic status reports. To be formatted using EDI; Edison pilot to report, receive, store, and track electronic information on inventions and patents.

Jim Lowrie
EGAD, incorporated into the ERA initiative.

George Stone
EDISON. See Grant.

NSF

Bill Kirby
Office of Information & Research, Rm 305
National Science Foundation
Arlington, VA 22230
Tel: (703) 306-1102
Fax: (703 306-0191
Email: wkirby@nsf.gov

FastLane, project to streamline grantmaking, including submission of proposal forms, final project reports, and announcements of awards. 16 participating institutions.

ONR

Brad Stanford
Director
Program Analysis

Project to use common electronic standard to pay grantee invoices at a handful of universities (UCLA). Plans to expand to 75 or more institutions.

University Contacts

CWRU

Kumar Mukesh
Programmer Analyst
SOM Research Office, TG1
Case Western Reserve University
10900 Euclid Avenue
Cleveland, OH 44106-4919
Tel: (216) 368-3792
Fax: (216) 368-4805
Email: kxm7@po.cwru. edu

Proposal and Award Database System on a Wide Area Network (fiber optic) comprised of a Novell server and personal computers. Supports data collection and analysis from proposal submission through account set-up.

NCSU

Linda Jackson
Director
Office of Sponsored Programs North Carolina State University Box 7514
Raleigh, NC 27695-7514
Tel: (919) 515-7512
Fax: (919) 515-7721
Email: Lindajackson@ncsu. edu

Russ Lea
Associate Vice Chancellor
Office of Research, Extension, and Outreach
North Carolina State University
Tel: (919)515-7200
Entail: russlea@ncsu.edu

Notre Dame

Tom Sweeney
Director
Office of Research University of Notre Dame 312 Main Building
Notre Dame, IN 46556-5602 Tel: (219) 631-4670
Fax: (219) 631-6630
Email: sweeney.17@nd.edu

Stony Brook

Bob Schneider
Director
Informatics and Compliance

Office of the Vice President for Research
State University of New York at Stony Brook
Stony Brook, NY 11794-3365
Tel: (516) 632-6961
Fax: (516) 632-9520
Email: bob@bob.rfs.sunysb.edu

Pilot project in the area of ERA with Digital. Using Linkworks to construct transparent (cross-platform) forms. Forms are then transmitted to various approval levels around campus. Signature and security built in. Phase I: Without attachments. Later phases will provide for movement of entire document., plus IACUC, IRB, safety approvals.

UCLA

Pam Webb
Assistant Director
Office of Research Administration
University of Calif at Los Angeles
405 Hilgard Avenue

Los Angeles, CA 90024-1406
Tel: (310) 825-2205
Fax: (310)206-4996
Emil: pwebb(~ocga. ucla. edu

Univ of CA

David Mears
Director
Research Administration Office
Univ of California
300 Lakeside Drive, 12th Floor
Oakland, CA 94612-3550
Tel: (510) 987-9838
Fax: (510) 835-3705

Wrote proposal called "Developing a Curriculum for Research Administration: A Call to Participate." Is there an ERA component?

Bill Sellers
Contract and Grant Officer
Research Administration Office
University of California
Oakland, CA 94612-3550
Tel: (510) 987-9847
Fax: (510) 835-3705
Email: william.sellers@ucop.edu
http://www.ucop.edu/raohome/cgmemos/let95-17.html

Electronic databases of FAR clauses, indirect cost waivers, sponsor codes, etc. Use of the Common Gateway Interface (CGI) to provide access throughout system.

Association Contacts

NCURA

Charlie Graham
Mernber, ERA for NCURA Director
Office of Sponsored Research Louisian State University
117 D David Boyd Hall
Baton Rouge, LA 70803-2755
Tel: (504) 388-8692
Fax: (504) 388-6792
Email: rcceg@unixl.sncc.lsu.edu

Natalie Kirkman
Exec Director
NCURA
One Dupont Circle, NW, Suite 220 Washington, DC 20036
Tel: (202) 466-3894
Fax: (202) 223-5573
Email: KIRK@ncura.edu

Ardis Savory
Chair, ERA for NCURA
Associate Vice Provost
Sponsored Programs and Research
Univ of South Carolina at Columbia
502 Byrnes Building
Columbia, SC 29208
Tel: (803) 777-2983
Fax: (803) 777-4136
Email: ardiss@spar.scarolina.edu

Web home page, articles on ERA. Natl Office is working with John Rodman on home page. Some GAMS involvement.

SRA

Robert Killoren
Chair, ERA for SRA
Director
Sponsored Projects
Penn State University
110 Technology Center
University Park, PA 16802
Tel: (814) 865-3396
Fax: (814) 865-3377
Email: Killoren@rtto.psu.edu

At Penn State: Electronic dissemination of funding information, Integrated Business Information System (IBIS) (an automated student, personnel, purchasing, accounting, and business system), electronic clearance data form for internal research review. Original participant in EDI, FEDIX, and FastLane. At SRA: Home page (communication). ERA identified in SRA's strategic plan.

Other Initiatives

University of Delaware: Proposal review page at https://128.175.60.91/research-demo.html/

University of Alaska: Rose Mary Ruff, snrhr@ims.alaska.edu

Cornell: Integrated Management System', GUI, Claudia Wedzinski

Virginia Tech: Funding information dissemination, Wendy Farkas, wfarkas@vt.edu

Penn State: Ken Blyth, information systems

Task Force on Electronic Communication

Charge:

a. Task force must keep committee up-to-date on ongoing electronic research administration efforts and recommend those efforts in which the FDP should participate;

b. Identify electronic research administration efforts that the FDP should initiate.


ATTACHMENT J

Membership and Organizational Structure Task Force

Preliminary Report

The Task Force was charged with three tasks. Below is our preliminary response with regard to each of those tasks.

1. Study the institutions, organizations, and agencies (groups) that should be recommended as eligible, whether as a full member or in some associated way, for participation in the FDP.

The original 1988 RFP for the FDP specified that "The selection of organizations is intended to be broadly representative of the research community, including primarily large and small public and private colleges and universities, and also possibly predominantly undergraduate institutions, non-profit research institutions, hospitals and profit-making organizations."

The Task Force sees no reason to depart from the original expectations of eligibility set forth in the 1988 RFP. It is interesting to compare these expectations with the present nonFederal FDP membership, which consists almost entirely of large academic research institutions, the majority public institutions but with a good representation from private universities.

Nevertheless, the Task Force believes the original concept of broad representation from research performers remains viable, and that membership eligibility should not be further restricted among particular classes of performers.

There are, however, a number of collateral issues that arise in this context. One is membership eligibility of professional associations, scientific societies, and other such groups. The Task Force believes establishment of an associate or affiliate membership status should be considered for such groups.

Another issue has to do with participation of state and local government entities in the FDP. The Task Force notes that a state government dimension was clearly contemplated in the original RFP.

There also is much discussion currently at a political level of devolution of greater authority from the Federal government to the state and local level, and much attention being given to establishment of "partnering" arrangements between Federal agencies, research performers, and state and local government entities. All of this suggests a need to address the issue of state and local government participation in the FDP. However, the Task Force recognizes the complexities of this issue, and recommends that it be deferred for later consideration.

With regard to Federal agency membership, the Task Force believes that any agency should be admitted to FDP membership on request under the same conditions that apply to other participating agencies (i.e. agreement to use of FDP terms and conditions in grant transactions). There is, however, another dimension to this issue, having to do with the participation of other Federal agencies that provide significant grant support for non-research purposes to FDP institutions. The most notable example is support for educational activities provided by the Department of Education.

The Task Force notes that other FDP member agencies, e.g. NSF, also provide significant support for educational activities. This suggests the focus of the FDP should be broadened to include organizations which perform or administer Federally supported research and education, especially where research is closely associated with education as at colleges and universities. It follows that the Department of Education, which is a key player in such activities, should be strongly invited to apply for FDP membership. Other agencies and organizations involved in similar activities, e.g. science museums, also should be eligible for membership.

Finally, the Task Force was asked to consider ways to encourage the participation of individual investigators in the FDP.

The Task Force strongly agrees that such participation is desirable. However, the Task Force does not believe that membership should be open to persons in an individual capacity.

The Task Force recommends that each participating FDP institution nominate one or more investigators to participate in the FDP on an equal basis with other institutional representatives (typically administrators at present). Similarly, the Task Force recommends that each Federal agency nominate one or more program managers for participation. In this way the critical perspectives of such individuals can be brought to bear on FDP activities, while preserving the organization-based membership concept.

2. Develop criteria and procedures for such groups to become members, or otherwise participate in, the FDP and recommend minimum obligations for such participants.

Last year a small working group of the FDP convened to respond to the National Performance Review (NPR) recommendations developed a set of proposed membership criteria. The Task Force believes the working group's criteria provides a very useful point of departure with regard to this task.

Specifically the Task Force recommends the following criteria based on the group's report be adopted:

1. To be eligible to participate in the FDP, an institution must be free of all material weaknesses in internal control structures, of all material matters of non-compliance reported in an audit conducted in accordance with the applicable "Single Audit Act" requirements, or other applicable audit requirements, and of all unresolved findings by Federal audit organizations.

2. An institution also must be in substantial compliance with Federal laws and regulations pertaining to grant and contract administration, such as timely technical, invention, and financial reporting, and other assurance and approval requirements.

3. Additionally, institutions must commit to participate in at least one or more new or ongoing FDP demonstrations or task forces annually, and to regularly attend, at their own expense, FDP committee and task force meetings.

The Task Force believes that the above commitment on the part of institutions should be formalized in two ways:

1) Through an affirmative statement of willingness to participate and compliance with the above criteria signed by a representative authorized to commit the institution in such matters; and

2) Through execution of a memorandum of agreement along the lines of the original agreement executed among the participating Federal agencies and institutions selected for membership in response to the 1988 RFP (the Task Force does believe the original agreement could be simplified and shortened for this purpose).

With regard to Federal agency membership, the Task Force recommends that "1)" and "2)" above also apply, with "1)" modified to reflect the agency's commitment to participate in FDP consistent with criterion "3" above and to use the FDP grant terms and conditions.

The Task Force believes that membership eligibility should be periodically reviewed against the above three criteria. A two-or-three year interval for such periodic review appears appropriate. Institutions not meeting the three criteria at that time would be dropped from membership. Consideration should be given to staggering membership terms, to avoid large-scale turnover.

Following from the above, if these recommendations are adopted, the Task Force believes existing FDP member organizations should renew their membership as suggested in "1)" and "2)" above. Current member institutions who do not meet the criteria, or who are not willing to formally commit to participation, should be dropped from membership. The Task Force recognizes these issues are trickier with regard to existing Federal agency members, and does not recommend any agency be dropped from membership. However, the Task Force suggests that those member agencies not currently meeting the minimum standards for participation suggested above be contacted (at a high level) and asked to reaffirm their commitment to the FDP.

3. Review the organization structure of the FDP in light of an expanded participation and make recommendations as to a workable governing and organization structure.

This area also was addressed in last year's working group report. The Task Force endorses III. A., B., C. and D. from that Report (with perhaps some modification in D.1. to reflect the Task Force's recommendations on individual investigator participation).

The Task Force does, however, believe there are certain difficulties with the present Steering Committee operation. Specifically, the Task Force questions the present distinction (also reflected in E. in the working group report) between the Committee of the Whole and Steering Committee. The Task Force notes that participation in recent annual meetings of the Committee of the Whole mostly has involved Steering Committee members. On the other hand, the Committee also notes the expanded participation in recent Steering Committee meetings engendered by the visibility given FDP in the NPR Report, and more recently the "direct charging" issue. All of this leads the Task Force to question the continued viability of the Steering Committee concept.

The Task Force believes consideration should be given to more frequent meetings of the Committee of the Whole, perhaps alternating on a quarterly basis with task-oriented meetings of smaller groups. One concept would be for the Committee of the Whole to meet twice a year (December and June) to review and approve recommended demonstrations and charter new task forces, with the smaller groups then meeting in the fall and spring (or more frequently if necessary). The Task Force recognizes that one disadvantage of this approach is to diminish the role of the FDP as a forum. Alternately, the fall and spring meetings could also include meetings of a reconstituted (and reduced) Steering Committee along the lines of E. in the Working Group report (this implies a two day format for these meetings, with task forces meeting one day and the Steering Committee the next. A similar format could be followed for the semiannual meetings of the Committee of the Whole).

If changes are made along the lines suggested above, the Task Force recommends the Executive Committee be expanded to include two Federal agency representatives and two institution representatives, in addition to a Research Roundtable representative and senior Federal science official as recommended in F. in the Working Group report. The Task Force also recommends continuation of the Federal Agency Working Group (G. in the report), and that the IAC be disbanded (H. in the report), with its functions shifted either to the Steering Committee or Executive Committee, depending on the future role of the Steering Committee.

The Task Force recognizes that its response to Task 3 is likely to be the most controversial of its three responses, but invites comment and feedback with regard to all of the above.